Steven Ciobo (Moncrieff, Liberal Party, Shadow Minister for Small Business, Independent Contractors, Tourism and the Arts) Share this | Link to this | Hansard source

I am certainly pleased to have the opportunity to speak to the Fairer Private Health Insurance Incentives (Medicare Levy Surcharge) Bill 2009 and cognate bills because, contrary to the titles, this legislation is not about fairer private health insurance at all. There are only two parties, the Liberal Party and the National Party, who will stand up for private health insurance in this parliament. The only people with the form and the track record of delivering for Australians through an incentives scheme to ensure that those who can afford to provide for their own private health insurance do provide for it are the coalition. We know that the great pretenders, who sit on the government benches, for quite a while ahead of the last federal election claimed to the Australian people, falsely, that they would stand up for private health insurance. The Prime Minister promised on 22 September 2007:

A Rudd Labor Government will retain the Medicare safety net as Australian working families have come to rely on it for help with their family budgets.

He also promised to not do anything to attack the 30 per cent rebate. But what do we see after only 18 months of the Australian Labor Party in government? We see the same ideological attack dogs in the Australian Labor Party going for the jugular of private health insurance and the Medicare safety net. We know that the Australian Labor Party have an ideological problem with private health insurance. I guess this was most accurately reflected upon by Graham Richardson, a former Labor health minister and a man who understands the importance of private health insurance incentives. After he lost office he remarked:

On Labor’s side, of course, they simply do not want to acknowledge that private health care matters. There is an ideological bent here that says, “Medicare is perfect,” which is ridiculous. “Therefore, it cannot be changed,” which is also ridiculous. “Therefore, nothing should be done about private health,” which is also ridiculous because the one thing they do not want to acknowledge is that private health insurance matters.

Those are the words of a former Labor health minister, a man who intimately understands the beating ideological heart of the Australian Labor Party. The government have dictated, under reforms and broken promises delivered in the last federal budget, that they will do what they can to effectively destroy private health insurance in this country.

For my constituents in Moncrieff this legislation is galling. About 55 per cent of constituents in my electorate have private medical insurance. About 72,000 residents in my electorate have private health insurance—that is, 16,000 families. Those people are taking the pressure off the public health system. We all know that in Queensland, thanks to the complete economic mismanagement of the Queensland Labor government, the public health system is very poor. I cannot possibly even estimate the number of times I have read in local media that the Gold Coast Hospital has been put on bypass because it simply cannot cope with the demand for the public hospital system. That is one of the key reasons the former coalition government had as a fundamental plank of policy the belief that Australians should be provided with the incentive to have private medical insurance if they can afford it, because on this side of the chamber we understand that every Australian in the private medical system eases the strain on the public system. Those opposite in the government never want to acknowledge that fact.

From speaking to my constituents and people as I move around my electorate I know about their sheer concern that, as a consequence of Labor’s changes and as a consequence of the bill before the House today, we will see thousands of people in my electorate alone pushed off the private health insurance system into the public system. So I say to all Gold Coasters: if you think you have a problem with the Queensland public health system now, if you think that the Gold Coast Hospital cannot cope with the demand on its services now, you have not seen anything, because under the Australian Labor Party’s reforms that are before this House today you are about to see a swamping of the public health system by millions of Australians across the board, who are, as far as I am concerned, going to effectively completely destroy the timeliness of public health, to the extent that it exists now.

In my own electorate there are some 2,771 people who are currently awaiting surgery at the Gold Coast Hospital. What is going to happen to those waiting lists, which the Prime Minister so earnestly promised ahead of the last federal election he would take care of? His words, ‘The buck stops with me,’ still ring in my ears. The Labor Party tried to pretend that they would not harm private health insurance, that they were a friend of private health insurance and that the Prime Minister had a plan to fix the public health system. And what do we see now? The proof is in the pudding as we see the Prime Minister has no plan. He has attacked private health insurance and is in fact going to make public hospital queues completely blow out. That is what the Australian Labor Party have proposed and are executing with these bills before the House today, which will ultimately cost thousands of people on the Gold Coast their private medical insurance.

At the margin, we know the Labor Party like to claim that they are simply changing the thresholds to ensure that only the wealthy no longer receive the subsidy—that only the wealthy no longer receive a rebate. That is the claim the Labor Party like to use, that is what their focus group tested and that is what the spin doctors are telling them: ‘Look, put that out there; let’s keep the whole class warfare thing going.’ That is the Australian Labor Party’s perspective: let us say that this is only about making sure that taxpayers do not subsidise the rich. But the reality is that as private health insurance has fewer people in it, premiums will go up and as premiums start to go up fewer people will have the incentive to stay in the private health insurance system. So we start a downward spiral similar to that the Labor Party last presided over, which saw private health insurance coverage in this country collapse to 30 per cent.

That is Labor’s form; that is Labor’s track record. I predict that will again be the consequence of this very myopic Labor Party policy. As more people leave private health insurance, premiums will increase and the more premiums increase the more people will leave. The more people leave, the more people will be on public hospital queues and the longer the waiting lists will be. That is an undeniable reality and a consequence of this policy change that the Labor Party has before the House today.

It is only the coalition that is prepared to draw a line in the sand and say we will stand up for private health insurance. The Labor Party likes to claim that the coalition does not have a plan or a policy. We could not have spelt it out any more simply for the Labor Party. This side of the House takes very seriously our commitment to private health and our commitment to the public system, which ultimately we are defending by standing up for the private health insurance rebate.

I notice the member for Brisbane laughing. Does he deny that as more people leave private health insurance the public hospital queues are going to blow out? Is that seriously the position put forward by the Labor Party? As a million people leave private health insurance and move to the public system, the public system is just going to cope remarkably, is it? No response. The Australian Labor Party know that their myopic policy is basically the same policy that destroyed public health in this country in the early 1990s. It is the same ideological gutting of private health that they are seeking to do by introducing this bill into the parliament today.

I will spell it out as indeed the shadow minister for health has spelt it out, as indeed the Leader of the Opposition has spelt it out. The Labor Party have a measly mouthed approach to policy—their so-called assault on the rich because it suits them to spin it that way. What the Labor Party should do is adopt the coalition’s proposal. As the Leader of the Opposition outlined in his budget-in-reply speech, we would offset the cost of this and retain the rebate in place and retain the Medicare safety net by ensuring that we increase tobacco excise by 12.5 per cent. This 12.5 per cent increase in the excise, roughly 3c a cigarette, is a positive health measure that directly addresses the single biggest cause of preventable death and disease in Australia and also ensures that adequate funds flow to retain the private health system as it currently stands. That is the only way; that is the only assurance I can give to the 72,000 people in my electorate who are going to be left hanging in the breeze as a result of the reforms that the Labor Party is putting forward. That is the only way that we can ensure that they retain their private and affordable coverage and that we do not see hospital waiting lists blow out under the Australian Labor Party as they have so many times.

These are bad public policy changes. The legislation is a gateway to Australia going back to a very flawed and failed public health system that turfs so many Australians, probably millions over the longer term, onto the public health system. In my own home state of Queensland the pathetic state Labor government has racked up $74 billion worth of debt and is having a fire sale of assets. Today the Queensland government announced the axing of the 8.5c fuel subsidy because they are so desperate for cash. That is the tier of government that ultimately has responsibility for the Queensland public health system. And this government is going to drive tens of thousands if not hundreds of thousands of people in my state onto the public system. It is an indictment on the Australian Labor Party. They should come clean about what they are doing and they should just confess that their ideological bent and pathological commitment to destroying private health insurance is nothing except a step in the wrong direction.

Arch Bevis (Brisbane, Australian Labor Party) Share this | Link to this | Hansard source

It had not been my intention to speak in this debate on the Fairer Private Health Insurance Incentives Bill 2009 and cognate bills. I did make some comments on these matters in the Main Committee during the course of the debate on the appropriation bills and I had not intended to enter this debate. However, there have been so many people in this debate from the opposition who have made assertions based on a total absence of the facts that it compels me to once again make some of these points on the record. The first thing that I want to make clear, as a statement of potential conflict of interest, is that I am now and have throughout my adult life been a member of a private health insurance fund. I joined when I was still a student and I have been a continuous member of a health fund all of that time.

I think uniquely in this parliament, I have also spent about a decade on the board of directors of a health insurance fund. Not only have I been a consumer of the services, I have been on a board providing the service for others. So I have a fair idea of the way in which the system operates, and I have taken a keen interest over the years in the way in which support for people in the public and private health systems functions.

Sadly, the prejudice of those opposite is not supported by the facts. It is a terrible thing in politics when the facts do not support your prejudice but it is a wise person who decides to stop, consider the facts and readjust their prejudice. Hopefully, some of that will happen, although I do not hold out great hope given the performances I have heard to date.

There are two things that the former government did to try to increase the percentage of the population who were covered by health insurance. They were, firstly, to introduce a 30 per cent rebate and, secondly, to introduce lifetime health ratings. The member for Moncrieff, who has now left the chamber, made mention of the fact that under Labor the percentage of the population with health cover had fallen to about 30 per cent. Well, I have news for the member for Moncrieff. At the end of 1998, well after the election of the Howard government, the percentage of the population taking out private health insurance cover was 30.2 per cent. Under the Howard government the figure was sitting at 30 per cent.

The Howard government then decided, in January of 1999, to introduce a 30 per cent rebate on health insurance, which effectively was about a $2½ billion payment at the time to people like me who had health insurance cover. What was the effect of that payment of $2½ billion to people like me? How many more Australians did it encourage to take out health insurance? The answer is: virtually nil. Three months after that rebate had been put in place, in March of 1999, the percentage of the Australian population covered by private health insurance was 30.4 per cent—that is, it had risen by 0.2 per cent. There was virtually no effect on the take-up rate of private health insurance during the period after the introduction of the 30 per cent rebate. In fact, at 30.4 per cent, the take-up rate was actually the same as it had been six months earlier in September of 1998.

In September of 1998, six months earlier, the take-up rate of private health insurance was 30.4 per cent. So if you have a look at the figures three months before the rebate was introduced and three months after the rebate was introduced you find that there was absolutely no change at all. There was no change whatsoever. And even if you have a look further ahead—if you look at the end of 1999, after the rebate was in place for the whole year—and ask what the take-up rate was for private health insurance, you find that it was 31.4 per cent. At best, the most optimistic assessment—the most optimistic claims that those opposite could make—is that the private health insurance rebate encouraged one per cent of the population to take up health cover.

I made the comment at the time that those matters were before this parliament that I thought the move would have no effect, and that was based on my experience in the industry. I thought it would be a useless endeavour—that it would spend a lot of money without actually helping health funds or helping to increase the quality of health for Australians. I also made the comment that the problem that health funds have is not the premiums per se. The problem health funds have is not the percentage of take up per se. The problem they have is in the churning nature of the membership. People would often take out health insurance at the point in their lives when they thought they may have high costs of health—for example, when they were thinking of having a family. So when they were young, healthy and single they would not take out health cover. As they were contemplating having a family they would think, ‘Right, we’ll take out health cover because there are going to be some costs.’ They might take out health cover for a couple of years and then leave the health fund. That was not unusual. In fact, it was that profile of clients, which health funds had to deal with, that forced premiums up.

There will be a change. That is all it is. I understand that some people are going to have to pay more for health insurance, and no government of any political persuasion likes to make constituents pay more for anything, but there are times that you have to make those tough decisions. But to argue beyond that, as the Liberals do, that this is going to create an exodus from health funds so big that it is going to force premiums up and be a burden on the public system, is not supported by any of the known facts. It is not supported by what happened when the former government introduced what was then a $2½ billion handout to people like me. I was in health insurance all my life before that handout. Hopefully, I will be in health insurance for a few years to come. That payment made no difference to me and, as it turns out, the most optimistic claim you can make is that it made a difference to one per cent of the Australian population.

But then the government did actually do something which I had mentioned in my speeches at that time, back in 1998—and that was to introduce lifetime health rating. Lifetime health rating did make a difference, because that churning effect was halted. Those people who thought, ‘I’ll hop in for a few years and then hop out, and then maybe a few years down the track I’ll hop back in,’ all of a sudden realised that if they did that after they had reached a certain age it would cost them more. So they decided, ‘If I’ve got to pay more I might as well be in for the whole time and get the benefit of the lower premiums.’

So let us have a look at what happened when health ratings were introduced. Health ratings were introduced in July of 2000. In March of 2000 the population take-up in health insurance had risen to 32.2 per cent. A part of that was a take-up in advance. So it had increased from 31.4 to 32.3, in part because people were getting ahead of the July start-up date for the lifetime health rating system. When you go to June, immediately before it kicked in—the day before it kicked in—you find that that had increased to 43 per cent. That is a huge increase. Instead of 32 per cent you now had 43 per cent covered, and by September of 2000 that had risen to 45 per cent. In fact, since then the percentage has gone down. If you look at the most recent figures you find that the take-up rate of private health cover is now around 44.5 per cent—it has gone back slightly.

My point is that lifetime health ratings have had an effect on the take-up rate and that is not affected by anything in this bill. In no way does this bill touch on those matters. What this bill touches on is the health insurance rebate. The evidence is clear. This is not a question of conjecture. This is not a question of political ideologies. It happens to be a fact that the rebate did not have a noticeable effect on the number of Australians who took out private health insurance. That is it. A Liberal member is going to hop up next. That Liberal member will have a prepared speech that probably includes all the same rhetoric that every other Liberal has hopped up about, and that Liberal member will want to repeat all those falsehoods, but I hope they understand that what they are saying is not supported by the facts. The indisputable situation is that there is no exodus from private health funds from this. There is no massive burden on the public health system from this. There was no massive benefit from private health insurance funds when the system was introduced. Nor was there any great benefit to public health when it was introduced. There was a transfer of about $2½ billion from tax revenue to people like me. If governments want to do that, that is fine, but let us be honest in this debate. I am tired of hearing speaker after speaker on the Liberal and National party benches hop up and simply assert things without a shred of evidence when the evidence clearly demonstrates them to be untrue.

I heard the member for Moncrieff talking about class warfare rhetoric. The final point, which I repeat in conclusion, is that the class warfare rhetoric I have heard in this debate has all been on the other side. Let us not kid ourselves. People on this side of the House, just like me, have private health insurance. I do not think there is anyone on the other side of the House who can say they were on the board of directors of a private health insurance company for a decade. I think we have probably got as much right to claim support for these people as anybody, so let us just leave the class warfare rhetoric out of the debate from here on in and have a look at the facts for a change.

Nola Marino (Forrest, Liberal Party) Share this | Link to this | Hansard source

I rise to speak on the Fairer Private Health Insurance Incentives Bill 2009 and cognate bills. These bills are simply further proof that Australians are now paying the price for the Labor government’s reckless spending and bad financial management. The bill title, which includes the phrase ‘fairer private health’, is itself a misnomer. There is nothing fair about these bills or the misleading repeated assurances by both the Prime Minister and the Minister for Health and Ageing that they would not reduce the health insurance rebate. However, the Australian people now know that they cannot trust this government and that this was just another example of the Prime Minister’s now infamous spin.

These bills cut the private health insurance rebate and at the same time increase the Medicare levy surcharge. Effectively, this is a double hit on Australians who are taking personal responsibility for their health needs by paying for private health cover. We are seeing Mr Rudd, the minister for health, Nicola Roxon, and the Labor government taking billions of dollars out of the private health system to pay for their $124 billion spending spree over the past 18 months. It is a direct and deliberate attack on both the private health system and the Australians who pay for it.

We have seen in the budget the very serious implications for the nation and for the Australian people, particularly for enterprising, hardworking families and businesses in regional Australia, including those in my electorate of Forrest. What we have in real terms is a return to the same old historic Labor governments of endless debt and deficit, now in proportions this country has never seen before. This debt and deficit is now forcing those on private health cover and their children to pay for this government’s reckless spending and its mismanagement of the economy. Those who are being forced to pay are essentially hardworking families who have taken personal responsibility, as I said, by taking out private health insurance and, in so doing, are reducing the cost and pressure on the public health system.

Why attack the health system? Why attack those with private health cover? My constituents, particularly those affected by this decision, cannot understand why the government has driven such a reversal in our economy, given that the Labor government inherited the best economic conditions of any government in the history of federal politics. In simple terms, 18 months ago we had no debt and $22 billion in budget surpluses. The deficit for 2009-10 is estimated to be $58 billion, with the net debt to grow to $188 billion by 2012 and with interest payments of at least $8 billion per year.

The budget, in effect, contains $315,000 million of peak debt and deficit by 2015-16, all on the nation’s credit card. This supposed temporary debt and deficit is all borrowed, and now those who are paying for private health insurance will help pay for the Rudd government’s temporary debt and deficit by cuts to private health. But people in my electorate know that this $315 billion has to be paid back by hardworking families and businesses like those in Forrest—the same 79,655 people who have private health insurance and who are now paying through cuts to their private health rebate and an increase to the Medicare levy surcharge.

But those Australians in the public system who do not have private health insurance will also pay, not just the 11.1 million Australians with private health insurance, over 1.8 million of whom are aged between 20 and 35. People between the ages of 20 and 30 years have a one-in-six chance of being admitted to hospital this year, as you would know, Mr Deputy Speaker. Also, insured Australians who earn over $75,000 will pay more because of the cut to the private health insurance rebate. If they drop out of private health cover entirely, they will pay more due to the increased Medicare levy surcharge. Insured Australians who earn under $75,000 will pay more through increased premiums if the younger and healthier people drop out of private health insurance. Uninsured people in my electorate will be waiting longer in the public hospital queues for necessary treatment because of those who will drop out of the private health system or who will reduce their ancillary cover. This would mean that more people would be dependent on the public health system. Hospitals will be under even more pressure than they are now. The government’s own figures show that these changes will affect 1.7 million adults. Industry analysis shows that the changes could affect over 2.4 million Australians in total.

My constituents also understand that the interest payments alone on the government’s $315 billion of borrowings, as we have seen in the private health insurance cuts in this bill, ultimately mean there will be less funding for core government services like health. My constituents also understand that the eventual repayment of principal and interest will have to be made by our children and grandchildren. People in my electorate will now suffer from the Prime Minister and the Minister for Health and Ageing’s broken promises. The Prime Minister and minister for health repeatedly and unequivocally promised the Australian people that they would retain the existing private health insurance rebates. This is not just a broken election promise; it was a frequently repeated commitment:

The clash between public and private in the health sector is an old one that has had its day. More importantly, Labor is committed to making sure both our public and private systems can work together for the benefit of the community, and that they are of world class standard.

That was Nicola Roxon on 7 April.

On many occasions for many months, Federal Labor has made it crystal clear that we are committed to retaining all of the existing Private health Insurance rebates, including the 30 per cent general rebate and the 35 and 50 per cent rebates for older Australians.

The Liberals continue to try to scare people into thinking Labor will take away the rebates. This is absolutely untrue—

said Nicola Roxon, the shadow minister for health, in a media release dated 26 September 2007. So much for the word of the Prime Minister and the health minister. Clearly, neither can be trusted on private health insurance.

This is not a minor issue. As I said, 1.7 million Australians will be affected by these changes, facing either higher premium payments or higher tax payments through the Medicare levy, and one million of these live in households with annual incomes of less than $26,000—the real battlers, the people who go without many basic needs just to have the security of private health insurance, people just like all of those with private cover who have taken responsibility for their own healthcare needs.

It is worth noting that private health insurance funds pay for 56 per cent of surgical procedures in Australia, and that includes 55 per cent of major procedures for malignant breast conditions, 55 per cent of chemotherapy treatments, 63 per cent of major joint replacements and 70 per cent of same-day mental health procedures. The coalition believes Australia should be a country of choice, which is why the previous coalition government increased the funding of Medicare from $6 billion to $12.5 billion—a 48 per cent increase in real terms—and increased private health insurance coverage from 34 per cent to 44 per cent. The Rudd government clearly does not understand the need for a strong, well balanced health system that supports Medicare but also encourages self-reliance through private health cover.

Western Australia has the highest rate of health cover in Australia. As I said, I have over 79,000 people with private health insurance in my electorate. So we in the west will feel the greatest impact of this decision. Those who exit private health insurance will become a greater burden on the public system in the south-west, and then the waiting lists will increase.

Health funding is a direct casualty of the Labor government’s cash handouts and reckless spending. Obstetric services, ultrasounds, reproductive technology and cataract surgery will all be affected. Women charged an average fee for private obstetric care will pay $500 more for their treatment with the proposed changes to the Medicare rebate. I quote the National Association of Specialist Obstetricians and Gynaecologists from 12 May:

Australia’s peak group of specialist obstetricians and gynaecologists today said the Government’s Federal budget announcement to wind back safety net rebates for private obstetric services will significantly affect affordability for the majority of Australian women choosing care from specialist obstetricians.

Dr Andrew Pesce, President of the National Association of Specialist Obstetricians and Gynaecologists, said this is a disappointing outcome for women who seek choice, access and affordability for pregnancy care.

Dr Pesce said although an increase in Medicare Benefits Schedule rebates will partially offset some of the financial burden and provide welcome relief for patients in regional and rural Australia, the end result for pregnant women and their families will mean significant increased out-of-pocket costs.

“If this increased burden means women can no longer afford private obstetric care, they will inevitably be forced to go over to the public hospital maternity services which are already overwhelmed and barely coping with the increased birth rate of the last five years,” Dr Pesce said.

The Australian Health Insurance Association data shows that since the 30 per cent rebate was introduced in 1999 total benefits paid by private health funds increased by 154 per cent.

The cut to the Medicare rebate for cataract surgery simply proves that the Labor government values complex precision cataract surgery at half the cost of a pair of glasses, and this ignores postoperative management, which is included in the rebate. It takes 12 years to train an ophthalmologist. Cataract surgery is extremely complex surgery with a very high level of technology and very little room for error. It is a procedure that keeps younger people in the workforce and enables people to continue driving. It prevents depression and prevents our more senior Australians from falling and breaking their hips, as well as preventing some nursing home admissions. Anyone who has had this surgery will tell you just what an impact it had on their life. Some people say it would certainly be worth more than half a pair of glasses, and most of us value our sight as possibly the most important of our senses.

This decision by the Labor government will change specialist service delivery in regional areas. The longer term impacts of this decision may be that regional and remote communities will no longer receive ophthalmology visits or surgery. Visits will no longer be financially viable in some instances. Then the most needy and disadvantaged regional and rural communities will be the worst affected. Gap fees may increase for patients, and those who cannot afford the gap will be placed onto increasing public waiting lists. The same battlers with the least resources will be impacted the most.

I asked the minister yesterday in question time:

Given the government’s reckless cash splashes, how does the minister justify this callous measure, which will have a devastating impact on the wellbeing of thousands of Australians—mostly battlers and pensioners—and in particular those in rural Australia?

The minister’s response was, in part:

The question of cataracts is certainly something that we do not resile from at all.

This is the same minister who said:

On many occasions for many months, Federal Labor has made it crystal clear that we are committed to retaining all of the existing Private health Insurance rebates, including the 30 per cent general rebate and the 35 and 50 per cent rebates for older Australians.

The Liberals continue to try to scare people into thinking Labor will take away the rebates. This is absolutely untrue.

What is crystal clear is that fewer people in my electorate will have access to crystal clear vision because of public health waiting lists for cataract surgery. And the Liberals’ statement was not untrue at all, was it? In fact it is the minister who has misled the Australian people. The Labor government is clearly and ideologically opposed to private health insurance.

My constituents have every reason to be scared of this callous, debt and deficit, same old Labor government. It is a government that has lost control of the nation’s finances. It is clearly a government that prefers to give out cash splashes rather than maintain essential health outcomes. Not only is this an attack on the private health system it is also an attack on the viability of small- to medium-health service businesses and enterprises in my regional electorate.

The coalition does not support any increase to the government’s $315 billion of debt and deficit, which it has admitted to at this time—which is clearly not the full extent of the debt and deficit—which is why we have offset this measure with a proposed increase of approximately 12.5 per cent in tobacco excise. This also a genuine health measure and one supported by the Heart Foundation, the Australian Medical Association and Quit executive directors. I support the amendments and oppose this legislation.

Don Randall (Canning, Liberal Party, Shadow Parliamentary Secretary for Energy and Resources) Share this | Link to this | Hansard source

In order to facilitate the business of the House I will be very brief because many other speakers before me have laid out the issues quite cogently. In speaking to the Fairer Private Health Insurance Incentives Bill 2009 and cognate bills, I have noticed it is quite Orwellian in calling it a ‘fairer private health insurance’, which is about as relevant as calling someone with red hair ‘blue’.

Kevin Rudd promised he would never touch private health insurance rebates, and here they are on the scrap heap today. So it is a broken promise. This bill is evidence of the Labor government’s preference for spin over substance. This broken promise guarantees and demonstrates that the Labor Party hates private health insurance.

The government’s plans to rip up private health insurance would only make it more expensive for those who can least afford it and stretch out the already lengthy waiting lists in public hospitals. In fact it was the former health minister under Labor, Senator Graham Richardson, who said, ‘Once a certain rate of private health insurance fell below a threshold, it really became an unworkable system.’ It is a pity that after they leave parliament they tell it as it is, and it is a pity the Labor Party would not listen to their previous minister.

I actually want to talk about some of the things in my electorate because they are specific and relevant. I also want to point out that the surcharge levy will essentially make sure that people opt out of the system because it will be an attraction. You can go and get free health, but what you do is force up the rates for everyone else who stays in private health; you take people out of the private health system and put them in the public health system. So you have one under capacity and one will be way over capacity.

There are other things that the government have ripped apart and things they intend to do in other services. I want to point out that they will cap obstetric services, assisted reproductive technology and cataract surgery. In relation to assisted reproduction technology, as the member for Cook pointed out the other day, the Deputy Prime Minister put together a large petition as shadow health minister before the election to tell women of Australia that she was going to help and protect them so that they could get the IVF treatments. What she has done today as Deputy Prime Minister is to tear up that promise. She is disingenuous and in this case she should absolutely hang her head in shame for betraying the faith of all those women who signed that petition.

There are 81,000 residents in the electorate of Canning with private health insurance and they are going to pay a heavy price for the Rudd government’s sustained attack on private health insurance. Those covered by private health insurance in Canning represent 68 per cent of electors. Almost 13,000 singles are insured and 20,000 families are covered, and it is their choice. This is what the system did offer: choice. This choice is going to become more difficult under the Labor Party’s penalisation of the people because the Labor Party hates anyone who earns over $150,000. To put that in context, if two school teachers, two ordinary workers, are earning salaries of $75,000 each—which is well under, I know, as many school teachers earn far more than that—they are going to be knocked out of this system because, combined, they will earn over $150,000, taking away the choice again. The fact is, at a time when families can ill afford it, the government has faced them with an automatic increase. As I have said before, this insurance is not for the rich; it is for the people who want to have that choice, whether it is in health, as in this case, but the Labor Party is doing it in education as well.

Recently the shadow health minister, Peter Dutton, visited the Armadale Kelmscott District Memorial Hospital with me and we had a look at the marvellous facilities there because they actually have a choice. There is a public health system and there is the Galliers private facility. That is a really good mix because it allows people to have choice within the same location. But have a guess what is going to happen to Galliers shortly when it becomes too expensive to exercise their private choice?

In order for Mr Rudd to repay the massive borrowings and return the budget to surplus, massive tax increases and big cuts in government spending are inevitable. In just 18 months the government has racked up debt heading towards $315 billion, in other words one-third of a trillion, and a deficit of $58 billion costing Australians $8 billion in interest a year. What is around the corner to service this debt? This is how he starts to try and claw it back. This is what it is: he has already means tested the baby bonus, he has capped family tax benefit B and he is phasing up the age pension and slashing superannuation contributions. Who knows—he probably has an agenda to up the superannuation preservation age. Meanwhile he is spending millions to get himself a seat at the UN.

The public have every right to be confused. The government does not take the Australian economy seriously. In fact they are out of control. Their control of the Australian finances is shambolic and out of control. Australia will end up paying the price on their private health insurance but they should ask themselves: what is next, Mr Rudd?

Paul Neville (Hinkler, National Party) Share this | Link to this | Hansard source

The government’s plan to remove incentives for Australians to take up private health insurance is another nail in the coffin of Australia’s health system. The so-called Fairer Private Health Insurance Incentives Bill 2009 and its accompanying legislation actually remove incentive for most Australians and take our private health insurance into very doubtful areas. Make no mistake; these measures will impact on all Australians, not just the ones immediately affected. I will show how that will occur.

Insured Australians who earn over $75,000 a year will pay more because of the cut in the private health insurance rebate. If they drop out altogether they will still pay more due to the increased Medicare levy surcharge. Insured Australians who earn under $75,000 will pay more because of increased premiums due to the younger and healthier people dropping out. It is estimated that premiums will increase by about 10 per cent or even more a year, compared to the five and six per cent that we have seen over recent years. Uninsured Australians will be waiting longer in public hospital queues for essential treatment because of the influx of more Australians from the private to the public system. This is a no-brainer; we all know that that is going to happen, but somehow we keep our heads in the sand and pretend it is not.

The government likes to call it the carrot-and-stick approach. Because it is estimated that one million Australians will reduce their cover, there are clearly very few carrots and one almighty stick. I personally find it quite galling as I was one of the ones who got the health insurance rebate increased for people at 65 and 70; in fact, I argued in the party room for a 45 per cent rebate, but because of the cost it was kept at 35 per cent at 65 years of age and 40 per cent at 70. It has proved a boon, especially for self-funded retirees and pensioners who want to stay self-insured. Of course, it is a very confusing system that has been left since then.

Since 1996 private health insurance in my electorate has gone from 31 per cent to 42 per cent. It is a stunning outcome for a seat that is regularly described as ‘challenged’. Because of our relatively low income and relatively high unemployment, that was quite an achievement. Almost 38,500 adults living in Hervey Bay, Howard, Childers, Bundaberg and the other communities in my area have private health insurance as a priority in their personal budgets, and they work exceptionally hard to afford it, knowing that it is in their best interest. They know that holding private health insurance helps reduce the demand on the public hospital system, and I applaud each and every constituent of mine who has made the decision to help provide for their own health care.

Under Labor’s idea of means testing the insurance rebate, these families and individuals, who already scrimp and save to pay for their private health cover, are going to be financially whacked, whether through the lower rebates or the higher premiums when those who cannot afford it drop out. The impact will be quite severe. The CEO of the Australian Private Hospitals Association, Michael Roff, described the charges as:

… a clear breach of election promises made by the Rudd Government.

He said they would:

… lead to a system that is confusing, complex and costly for those millions of Australians who take responsibility for their own health care costs.

He went on to say:

The current system of rebates is simple, transparent and easy to understand. The new proposals introduce 10 different levels of entitlement or surcharge depending on income level and age. It will be difficult for people to work out their entitlement and will create a huge administrative burden both on Government and health funds.

On the other hand we have the Minister for Health and Ageing, who says these measures will provide a ‘fairer distribution of benefits’ under a ‘mixed model of balanced private and public health services’—all the while saving the government $1.9 billion over four years. The minister also thinks that only 25,000 people will drop out of private health insurance, and by her estimation this will result in 8,000 public hospital admissions over two years. I will be surprised if it is that low. In fact, she described the impact of these changes to be ‘insignificant’. I would like to agree with her, but I am sure those figures will not stack up.

The Australian Health Insurance Association has analysed the 2009 budget figures in conjunction with industry data and research conducted by Roy Morgan Research and Ipsos, and it calculates that up to a million people will either downgrade their coverage or drop out of coverage altogether because of Labor’s idea of dismantling the existing 30 per cent rebate. The AHIA has produced actual hard figures: 241,000 will drop their coverage and about 728,000 will downgrade their coverage. That is pretty close to a million. The AHIA chief executive officer, Michael Armitage, had this to say when releasing the figures:

Every Australian knows that you can’t take $1.9 billion from the pockets of people paying for their own health care by taking out private health insurance, and not have a major impact on private health insurance.

               …            …            …

The impact of one million people leaving or downgrading their cover will mean that the premiums of everyone else remaining in private cover will have to increase, so that premium increases will also have a significant impact on those people with incomes of less than $75,000.

Clearly, the government’s decision to means test the private health insurance rebate is another example of short-sightedness when it comes to looking after the health of our fellow Australians.

The Prime Minister, who said, ‘The buck stops with me,’ promised many times during the election campaign that he would retain and protect the private health insurance rebate—and within 18 months he has broken that pledge. I have six quotes here from the health minister and the Prime Minister where they clearly say that they are going to retain the health insurance rebate, but I know we are trying to save time tonight so I will just bring one to your attention. The health minister said:

The government is firmly committed to retaining the existing private health insurance rebates.

What is significant about that is that it was said on 24 February this year. At that time the government would actually have been drafting the budget. Quite frankly, I think it is disgraceful. In other words, the public were lied to, and then, when the government wanted its way, it did what it wanted to anyhow. So we now have a government that wants to slash rebates, forcing people to leave the system and pay even more for their health coverage.

What also concerns me is the health minister’s statement that there have been ‘significant developments’ and ‘positive signs of improvement’ in public hospitals. It certainly is not the case in Queensland, and it is not the case in New South Wales, as you well know, Madam Deputy Speaker Bird, because you come from a state where some of the health councils cannot pay their month-to-month bills. In Queensland in the three months to 31 December last year compared to the same quarter of 2007, Queensland hospitals experienced a 3.2 per cent increase—that is 11,744 more patients—in the number of people treated in emergency departments, a 5.9 per cent increase in the number of people admitted to hospital, an 8.4 per cent increase in the number admitted for same-day care and a 3.6 per cent increase in the number of people admitted for more than one day. As recently as March this year the AMAQ reported that the Queensland health system was still plagued with ongoing problems such as severe shortages of acute, emergency and overnight public hospital beds, staff shortages, high bed occupancy and declines in the standard of workplace facilities. Seriously, does that sound like a system that is on the improve?

Further, Queensland’s public hospital performance report for the December quarter of 2008 showed that more than 7,000 people were languishing on surgery waiting lists and—believe this or not—259 category 1 patients were waiting longer than 30 days for surgery. And this is the system that the Rudd government promised to fix: ‘The blame game is over. The states are in our pocket. We’re going to do all these things and everything will be sweetness and light.’ That is what we were told before the election. Look what we have got now: an even bigger mess, with tens of millions of dollars being poured into an endless bucket. How on earth can the public system cope when we are going to put up to another million people out of private health insurance into the public system?

The Bundaberg Base Hospital and its staff have gone through their fair share of trauma in recent years, and the revolving door of Queensland health ministers, all of whom have strived to defend their position, is quite sickening. As always, the statistics that are trotted out to illustrate improvements in the hospital’s staffing numbers are little more than shallow spin. Earlier this year, the then health minister, Stephen Robertson, claimed that 33 more doctors and 111 more nurses had been employed at the Bundaberg hospital since 2006, giving the impression that the hospital’s capacity had improved markedly. Sadly, there have been an additional 144 names on the payroll but they are not all working full time. For example, while there are seven anaesthetists working at the hospital, they are working an average of 6½ hours a week—note that: 6½ hours a week. The minister also boasted that there were nine—note this: nine—paediatric specialists at Bundaberg hospital, but he failed to report that they were working an average of 156 minutes—that is 2½ hours—a week. I will wind up on this point because I understand we want to keep the contributions in this debate short. So, to summarise, what I would like to see is the staff numbers put out by Queensland Health reduced to full-time equivalents. I think they would then be embarrassingly low.

In saying all these things, I want to make one thing very clear. I do not reflect in any way on the dedicated staff of the Bundaberg hospital, especially the medical and nursing staff and ancillary staff. They put in a superb effort. My argument is for their hospital to be granted appropriate staff resources and facilities so that it can function properly. If ever a hospital in Australia has had a bad time since the start of the Patel era, Bundaberg has. It deserves special attention. Back in 2006 the state Labor government promised a $4.1 million upgrade to the hospital in the wake of the ‘Dr Death’ scandal. But, since then, the Queensland Labor government has only budgeted $9 million of the works over the last two state budgets, so the job that was meant to be completed early in 2008 is clearly going to be many years behind schedule. Although there is talk of another tranche of work to start shortly, we are already 17 to 18 months behind on the government’s promise. Meanwhile, the population of Bundaberg and surrounding areas continues to grow. It is much the same in the other parts of my electorate, with Hervey Bay facing challenges. I think Labor have a lot to answer for. They promised a new era of health care. All we have seen are cutbacks, and a pathetic lack of performance by their state colleagues.

Robert Oakeshott (Lyne, Independent) Share this | Link to this | Hansard source

I rise to speak on this package of legislation, the Fairer Private Health Insurance Incentives Bill 2009 and related bills. Of the first two points that I would like to make, the first is procedural as to the naming of the bills. This is the second package of legislation before us today—the first was the Fair Work (Transitional Provisions and Consequential Amendments) Bill 2009 package—to reflect fascination with the use of ‘fair’ or ‘fairer’ in the naming of legislation. In the eyes of many in the community, I think they would suggest that that is for them to decide, not for government to tell them through the language used in these packages. When we are seeing in this particular legislation before us rebates down and surcharges up, the use of the word ‘fairer’ has a fair element of audaciousness about it. The second point concerns the time frame in that the date of effect is 1 July 2009, only 30 days away. As a purist as to parliamentary processes, it would be nice to see healthy debate—and also respect for the parliament—well in advance of legislation going through this place. Respect should be given to all members and to the role that the parliament plays in deciding on and potentially amending legislation. I note the issue of the alcopops tax, even though I am supportive of the government position. The financial implications of the role that the parliament played, when the timing of the passage of the legislation did not marry up with some financial implications, should be a stark reminder, I hope, to everyone that the parliament deserves respect, with legislation being presented well in advance of potential dates of implementation.

As far as the legislation before us is concerned, it touches on two questions. The first is the issue of the universality of public health generally in Australia and the second goes to revenue. On the first question of the role that private health insurance plays in Australia, I would hope it is broadly agreed by every member of this place representing every constituency or political party that universal free health is not and never was intended as a system of delivery of health within Australia. Even the architects, Graham Richardson and Paul Keating, talked about the need for a private health package in the delivery of universal health care, which is almost a mythical term in the delivery of health care in Australia and one that I think needs to be taken out of the language by anyone in a public position when talking about the delivery of health care. We do need a private health system to make the public health system work within this country. It is a fine balancing act and any changes are therefore sensitive and certainly I will be adopt a very close watching brief in regards to the implications of changes, such as those in this package, to that very fine balancing act between the private and the public systems within Australia. We are hearing healthy debate over this legislation from both sides of the chamber as to the implications as to how many people will be staying in and how many people will be leaving and the flow-on implications for the public system. I will certainly be watching very closely. I think the question can really only be answered as time passes as to whether the pressures being placed on the public health system as a consequence of these changes are acute and therefore unwelcome as part of budget package that has been put forward by the government.

We in the area of the mid North Coast have lived and breathed this issue of private versus public, and it has been an incredibly divisive issue for the community of Port Macquarie in particular. For anyone who has followed the health debate, the Port Macquarie Base Hospital was the first and really only privately run public hospital to be delivered in Australia and there were a whole range of both positive and negative consequences of what I have referred to as that fine balancing act. In February 2005 that hospital was bought back and reconnected into public health system. Again, there are positives and negatives from that reconnection into the public system. One of the unique benefits that has been left for our region is that we have 35 specialists who have based themselves in Port Macquarie and are delivering a standard of specialist health care that is the envy of most regions in Australia, the reason for that being that, when it was a privately run public hospital, there was a fair bit of autonomy on the part of CEOs and decision makers within the range of companies that ran the hospital at various times. That allowed for some decisions to be made quickly in the placing and the buying of specialist services for our community. We now have a really good collegiate feel among our medical specialists. As I said previously, ours is the envy of regional Australia, particularly as to the number of specialists.

It is a fine balancing act though so, once again, any changes can upset all that in what is a pretty skinny market that we and specialists work in in the delivery of health care in a regional centre. Whilst changes may quite often be made in considering some great packages that metropolitan specialists are on, I would hope consideration is also given to this high-wire act of the delivery of health care in regional areas. Now that the hospital is back in the public health network, we have got these specialists largely working on rotation among three local public hospitals—Kempsey, Wauchope and Port Macquarie—as well as balancing that with their own private lists. Once again I will be talking with and listening to those specialists and with health administrators as to the implications of changes such as these and the various changes to the costs in the delivery of various services. Cataract service delivery in particular is one that has already arisen in my regional centre. Whilst certainly allowing the government their mandate, we will be watching the effect of this range of changes that we are seeing in the budget very closely and we will be listening very closely. If it does jeopardise the delivery of health care in what is a very sensitive health delivery environment on the mid North Coast of New South Wales, this is a conversation we will continue to have with the government of the day and hopefully we will see this issue addressed in the future.

The question of pressures on public health also fits under that same banner, largely because of the failings of some state government budgets. High-growth areas are not seeing physical infrastructure keep pace with the demands that are being placed on the public health system in New South Wales, and on the North Coast in particular. To make my point: the Port Macquarie Base Hospital was built in 1992 for a maximum capacity of presentations to the emergency department of 14,000 people per year. Last year it had over 30,000 presentations. So the maximum capacity of presentations to the emergency department has more than doubled. It is at breaking point. That is exactly why we have put a submission to the Health and Hospitals Fund to try to get that question of an expanded emergency department and intensive care unit addressed, because people are going to continue to move to the North Coast. Unless government keeps pace, we will have to put up the ‘house full’ sign on the North Coast. If the physical infrastructure, and the health service delivery in particular, does not keep pace, we have got some real, chronic problems on our hands with the delivery of health care.

So, once again, any changes that might introduce more pressures to that public hospital system, which is already under pressure in high growth areas such as mine, is unwelcome. Once again, it will be a watching brief from my perspective. But if there is a sniff that this sends those presentations to the public emergency department or to the waiting lists for elective surgery any further through the roof than they already are, then it is a conversation we will continue to have with the Minister for Health and Ageing and the government generally. This is a particularly sensitive issue for an area which has the most elderly demographic in the country, has high growth pressures, is a low SES area and really needs government to step up to the plate on the delivery of public health services. When it does not step up to the plate, any changes to private health insurance are a cause for great and significant concern.

My final point is really a question to the government and relates to revenue. For the out years of 2012-13, I am reading that as a spend of $680 million a year compared to the immediate savings in 2009-10. If this is a decreasing rebate across the three tiers and an increasing surcharge across the three years, I would be very interested to hear an explanation of the maths from the government. If this is a savings measure, then obviously some questions will be raised about where those savings are found. Is this an expansion of incentives or is it not? Is this an expansion of pressures on the public system or is it not? I may be reading those figures incorrectly, but the way I read them leaves open some questions about the very name of the bill—whether it is a fairer private health insurance incentive—and the question of how, if across the three tiers we are seeing general decreases in rebate and increases in surcharge, those maths add up with the forward years as they are presented in the revenues. I would love to hear the minister’s response, if she is going to respond, and I will continue to watch the implications of this legislation. I accept it is part of the government’s general mandate and the means-testing philosophy that we are seeing from this government, but I am very conscious of the pressures arising from an expanding population base on the mid-North Coast that is not seeing an equivalent rate of expansion in the public health system. Therefore, it is more than likely we will be having another conversation with government about this and about health reform generally.

Kay Hull (Riverina, National Party) Share this | Link to this | Hansard source

It is now official: this is a tricky government. In fact, it is a mean and tricky government—mean and tricky because it has taken away this benefit to the Australian people and tricky because it has also increased the surcharge levy so that people have no choice. The people who have taken responsibility for their own health will have no choice. So it is official: it is a mean and it is a tricky government. It is also official that it is a government that tells untruths. On no fewer than five occasions, the Minister for Health and Ageing and the Prime Minister, Kevin Rudd, have said that this would not happen. In fact, there was a categorical ‘Absolutely not’ from the Prime Minister, Kevin Rudd, when he was asked in an interview in August 2007 whether or not he was going to take off the rebate for private health funds. A letter to the AHIA clearly said:

Federal Labor is committed to retaining the existing private health insurance rebates …

Kevin Rudd, in a press conference in the Prime Minister’s Courtyard on 25 February 2008, said:

The Private Health Insurance Rebate policy remains unchanged and will remain unchanged.

Then we have the statement from Nicola Roxon, when she was the shadow minister:

On many occasions for many months Federal Labor has made it crystal clear that we are committed to retaining all of the existing private health insurance rebates, including the 30 per cent general rebate and the 35 to 40 per cent rebates for older Australians. … The Liberals continue to try to scare people into thinking Labor will take away the rebates. This is absolutely untrue.

Ms Roxon, now the minister for health, told the Age on 24 February 2009:

The Government is firmly committed to retaining the existing private health insurance rebates …

They are mean and tricky and proven not to be able to tell the truth.

When I look at issues of great effect in my community, I look at Wagga Wagga Base Hospital in particular, a hospital that simply will not be able to meet the demands that the change in hospital treatments will produce. We saw back in 1996 a levelling out of hospital treatments, of public hospitals basically having the same treatment patterns as private hospitals. Then, as a result of the Howard government’s rebate and their commitment to ensuring that Australians, if they wanted to pay for choice, could actually pay for choice and would get compensated and get rebates for that, we saw an exponential growth in in-hospital treatments by private hospitals. It was a huge growth. Fifty-five per cent of malignant breast condition treatments were done in private hospitals, 55 per cent of cancer therapy was done in private hospitals, 55 per cent of hip replacements were done in private hospitals, 63 per cent of other major joint replacement and limbic reattachments were done in private hospitals, 70 per cent of same-day mental health treatments were done in private hospitals and 73 per cent of lens procedures were done in private hospitals.

Can I go into lens procedures. We have seen the intention to cap many of the EMSN, extended Medicare safety net, benefits. Some of those will be to do with pregnancy issues, obstetric issues and reproductive issues. They will be varicose vein surgeries and cataract surgeries. We know that in communities, and particularly those communities with a significant Indigenous population, cataract surgery has restored the quality of life of hundreds of thousands of people. What we are going to face now is not just a capping of the extended Medicare safety net; we are now going to see introduced—it has not been introduced yet but it will be introduced—a 50 per cent reduction in the rebate for cataract surgery.

Let me clearly explain that in Wagga Wagga Base Hospital the Greater Southern Area Health Service has cut the theatre lists back to three cataract surgeries per month. The waiting lists have blown out. Up until the end of last year, people waited about three months to get cataract surgery done in Wagga Wagga Base Hospital. Now that those surgeries have been cut back to about three per month, that has blown out to 11 months. This is for one particular ophthalmologist. Many of his colleagues have much greater extended waiting lists, if we are just talking about cataract surgery. The waiting list grows by about two months every month. So we have a system now that will bring people back into the public hospital system, which we can certainly ill afford in my electorate of Riverina.

The Wagga Wagga Base Hospital simply cannot cope as a regional referral centre. It is an ageing, decaying mess. The staff in Wagga Wagga Base Hospital do an absolutely sensational job trying to do the right thing by the patients. In fact, they are working double standard overtime to do the right thing by the patients. But for 30 years the Wagga Wagga Base Hospital has failed to get the attention of any government, whether state or federal, coalition or Labor—certainly over the last few years it has been the Labor government. What is happening is a disgrace. Now we are going to have an even greater call on that hospital. In my electorate of Riverina I have 65,607 people covered with private health insurance, and we have been in drought for seven years—something’s gotta give. The fact is there is going to be a major impact on the public hospital system in my electorate of Riverina. I sincerely believe that there must have been many ways in which we could have avoided this.

I believe that there was always the intention to cut private health insurance. In all of these great statements that were made publicly, there was one person who maybe told the truth. That was Peter Garrett, when he stated, ‘Once we get in we’ll just change it all.’ That comment was made to Steve Price on 2 November 2007. It appears that is exactly what the government has done. The government has taken the Australian people to be fools. The government is mean and tricky. The government has taken a choice away from the Australian people. The government will blame the economic downturn for this, but I believe it would be the view of the Australian people that the government cannot tell the truth, did not tell the truth and has never supported private health insurance. When we were in government, the then opposition—the now government—absolutely, vehemently opposed the 30 per cent rebate for so-called rich people. There are 65,000 people in my electorate who are not rich; they do not make the list of Australia’s richest. I believe the government in this case has got it absolutely wrong.

Andrew Southcott (Boothby, Liberal Party, Shadow Minister for Employment Participation, Training and Sport) Share this | Link to this | Hansard source

I would like to start speaking on the Fairer Private Health Insurance Incentives Bill 2009 and related bills by reflecting on the landscape of the Australian health system. There are a number of established parts of the landscape: Medicare, bulk-billing and community rating for private health insurance. We on this side of the House—the Liberal and National parties—accept, recognise and will go into fight for the role of private health insurance in our health system. We believe that private health insurance plays a very important role in taking pressure off the public hospitals. Australia’s health system is not like the one in the United Kingdom, with the majority of health being delivered through the National Health Service, and it is not like the fragmented health system of the United States, which is expensive and has much poorer health outcomes. Our health system has delivered one of the healthiest populations around the world. Australia has one of the longest life expectancies of any developed country, of any country. Private health insurance plays a very important role in taking pressure off the public hospital system.

Many of us who have watched the Labor Party, who have watched parliament and who have private health insurance in our heart of hearts always knew that this day would come. There was a reason why Labor were continually peppered with questions about what they would do with the private health insurance rebate. The only surprise here is that it took them 18 months to break that promise. The promise was explicitly given and brazenly broken. The Prime Minister, in an interview with Leon Byner in August 2007, was asked if he was:

… going to take off the rebate for private health funds … that’s the 30 per cent we’re talking about?

The Prime Minister responded:

Absolutely not.

In a letter to the Australian Health Insurance Association only four days before the election the Prime Minister again said:

Both my Shadow Minister for Health, Nicola Roxon, and I have made clear on many occasions this year that Federal Labor is committed to retaining the existing private health insurance rebates, including the 30 per cent general rebate and the 35 and 40 per cent rebates for older Australians.

Again, the then shadow minister for health, the member for Gellibrand, in September 2007, in a media release said:

On many occasions for many months, Federal Labor has made it crystal clear that we are committed to retaining all of the existing Private Health Insurance rebates, including the 30 per cent general rebate and the 35 and 40 per cent rebates for older Australians.

           …         …         …

The Liberals continue to try to scare people into thinking Labor will take away the rebates.

This is absolutely untrue.

It is with regret that we have been proven right on this. You have to look at the previous Labor government. It took a number of decisions between 1984 and 1986 which in toto increased the cost of premiums by something like 40 per cent. That began the downward slide of the level of private health insurance cover. It was the 30 per cent rebate and Lifetime Health Cover that got private health insurance back to a sustainable position. One problem with this measure is this. Winding back the support for private health insurance has a direct impact on 1.7 million Australians. To the extent to which young, fit and healthy people drop out of private health insurance, we will see a premium rise for the 11.1 million Australians who hold private health insurance.

In my own electorate of Boothby, private health insurance is incredibly important. There are 68,587 adults who hold private health insurance—that is, 71 per cent of the adult population hold private health insurance. Sixty-three per cent of adults hold hospital insurance and 69 per cent of adults hold general treatment insurance. In the electorate of Boothby, there are many excellent private hospitals: Flinders Private Hospital, Blackwood and District Community Hospital and Griffith private hospital. Not in my electorate but in the electorate of the member for Adelaide is Ashford Hospital, which started life as a community hospital established by the cities of Mitcham, Marion, Unley and West Torrens—that is, it was established by councils in the southern and western suburbs of Adelaide. Also, people use their private health insurance for visits to specialists and for inpatient visits to public hospitals, to either Flinders Medical Centre or Royal Adelaide Hospital. So it does pay a very important role in our public system.

The argument that has been put up by the government is that this is a savings measure. It is cited not only as a savings measure but also as a growth savings measure. That means that over time more and more people will be paying much higher premiums and will be chucked off the level of rebates that they currently have. Their big killer point against our very responsible alternative of increasing tobacco excise by one-eighth or 12 ½ per cent—the equivalent of 3c per cigarette—is to say, ‘Over 10 years our winding back of the private health rebates will save a lot more.’ That is code for more and more people getting a reduced private health insurance rebate as time goes on.

In conclusion, this should come as no surprise to people who have followed the Labor Party and its positions on private health insurance. The surprise really is that it happened so quickly. We are 18 months from the last election. The previous Labor government waited until its second term to break a lot of its promises and really wind back the support for private health insurance. The question now is: why would you believe anything that the Labor Party says on the issue of private health insurance? On the subject of private health insurance, the Prime Minister and the Minister for Health and Ageing simply cannot be believed. They cannot be believed because they gave explicit promises before the election and they broke those promises after the election.

Voters in my electorate of Boothby, where this will affect 71 per cent of adults, would take a very dim view of the Labor Party’s actions here. Something like one million Australians, many of them elderly, on incomes below $26,000 hold private health insurance. While they will not have their rebates pulled back by this measure, they will be hit by any premium rises as a secondary consequence of people who may drop out as private health insurance premiums increase. This is a very bad measure for my electorate of Boothby. I have no choice, and the opposition has no choice, but to oppose this measure, as has been indicated by the Leader of the Opposition and the shadow minister for health.

Luke Simpkins (Cowan, Liberal Party) Share this | Link to this | Hansard source

Tonight, I would like to speak on these bills, the Fairer Private Health Insurance Incentives Bill 2009, the Fairer Private Health Insurance Incentives (Medicare Levy Surcharge) Bill 2009 and the Fairer Private Health Insurance Incentives (Medicare Levy Surcharge—Fringe Benefits) Bill 2009. This legislation reduces government support for private health insurance. Therefore, it discourages self-reliance. Not only that but the Australian Health Insurance Association have said:

The Rudd Government’s decision to dismantle the private health insurance rebate will place increased pressure on the public hospital system and force up premiums for those Australians who take responsibility for their own healthcare by taking out private health cover.

They also say that, as a result of these changes, private health insurance will cost more for every person in Australia with private health insurance. As premiums rise as a result of these changes by the Rudd government, more people will join the queues of the public hospitals. How, then, is any of this fair or even good for health outcomes? That leads me to my next point. I always find it interesting that there always has to be a word in these bill titles that suggests the validity of the bill. It seems that none of these bills can stand alone, and by that I mean that this bill could have just been called the ‘Private Health Insurance Incentive Bill 2009’. But the government has chosen to make an assertion as the precursor to this title and in the two other bills. I say ‘assertion’, as with all this government’s work just because they say so does not mean that it is actually the truth. The issue of whether these bills make anything fairer is not only questionable but downright false.

These bills are not about being fair, but they exist for two completely different reasons. These bills are about saving a few dollars, but primarily they are about an ingrained ideological hatred of private health by the Labor Party. By ‘ideological’, that is just another attack consistent with the socialist ideology that guides those opposite. This is up there with the Labor belief that anyone who is successful in business has achieved that success by oppressing workers. This is about the assumption that anyone who has been a success or has made sacrifices to adopt some choices for self-reliance should be discriminated against and should pay more tax than they already do. It is a very old and warped view of the world. It has failed in its communist form, in its socialist form—in collectivism in all respects—and it continues to fail this Rudd Labor government as it continues to pursue its ideologically based economic plans. The government’s approach is a clear and present danger to this nation’s success, and with each passing day it becomes more obvious. But I will leave that point for now, because I need to move on to the pre-election statements by the now Prime Minister.

Everybody now knows that this is clearly a broken promise by the Prime Minister. Everyone knows that the Prime Minister guaranteed before the election that there would be no changes to the private health insurance rebate. As sanctimonious as the current Prime Minister is on such issues, clearly the buck does not stop anywhere near him. It is a point worth making that in 1996 the finances taken over by the coalition government were far different from those taken over in 2007 by the now Prime Minister. In 2007, the surplus was going to be around $21 billion. All the government debt was paid off and money was in the bank for the future funded infrastructure funds. It was all there and all clear in black and white. The ledger was truthful and allowed both sides of politics in that election campaign to assess priorities and speak of spending.

Contrast that with 1996. I believe it was Kim Beazley who said that the budget was in surplus, and provided figures, or rather statements, upon which decisions and promises of the coalition were made. The only trouble with what happened in 1996 was that the Labor government was not telling the truth; it was a big cover-up. In fact the last Labor budget was $10 billion in deficit and they left an unexpected $96 billion in debt. It was from that time and in those circumstances that the hard decisions of the early years of the coalition government were made. The country could not afford the promises made because the ALP’s departing government lied in the 1996 election campaign.

It is therefore obvious that while there were reasons in 1996 why the coalition government could not deliver on some of its election promises, that same justification has not been available to the Rudd Labor government. The reality is that the current economic challenges are a convenient excuse to further the ideological attack on private health insurance and those on higher incomes, being those who earn more than $150,000 per year, which Labor suggests are the rich. It is not considered how many hours you work to earn that money; it is just the fact that you get paid that much which makes you their enemy. Clearly, the socialist view is that anyone on $150,000 or more just does not pay enough tax and certainly does not deserve it. I will leave that there.

In a similar vein, while I attribute these bills and these changes to an ideological attack, for those who think it will go no further, just think carefully. When the former coalition government introduced the private health insurance rebate, who voted against them? It was of course the Labor Party, and it is now the government of this country. Clearly it has always been opposed to these rebates. The Australian people should keep this in mind. The Labor Party said one thing before the election; after the election it says something different. This change is just another step towards the dismantling of government support of those with private health insurance, a system it sees as something the government should not be supporting. The message is very clear for those 62,000-plus voters who have private health insurance in Cowan: the Rudd Labor government thinks you should be on your own with private health. It wants you to pay with no government support. It broke its pre-election promise on this matter. That is a fact. It voted against the rebate support provided by the coalition. That is a fact. The Labor attack on private health continues. That is clearly a fact. This will not be the end of making Australians pay more for choosing to have private health insurance. The Rudd Labor government will continue to make it harder for Australians to keep out of public hospitals. That is a fact.

No doubt the government will find support for this legislation in this building. The Greens will be right there in supporting this legislation, no doubt about it, although they will want to go further. They will want the government to cut all support for private health. That is of course the government’s plan. The only difference is the time frame. The Greens want to skip to the endgame while the Labor Party wants to progressively kill all the support. Today’s Labor target, also known as a justification for killing support of private health, is those nasty rich people. Who will be the rich people of tomorrow? Perhaps those earning over $125,000 or maybe over $100,000 a year. Time will tell.

Of course any discussion of private health cannot be undertaken without speaking of the hospital system. The state hospitals all the way around the country are struggling. I believe that the health system in Australia is still world-class. Australians who have travelled the world would realise that. I say that if you are in need of emergency health care, then there is no place on earth you would rather be than in an Australian hospital. I certainly have confidence in Joondalup Health Campus, the Royal Perth Hospital and the Princess Margaret Hospital for Children. Although I have such faith, the reality is that the elective surgery waiting lists are very long and the delays are substantial. This is the big difference: emergency care is very good and elective surgery is characterised by delay and frustration. Fundamental reform is required in this area. With regard to elective surgery, I want to know how the Rudd Labor government’s attack on private health insurance, driving people onto the elective surgery waiting lists, is going to do anything but lengthen those lists.

Before concluding, I want to let the parliament know that while the Rudd Labor government may believe that private health insurance is a rich person’s indulgence, the opposite is in fact true. A majority of people in my electorate have private health insurance and they are not rich. I would also remind the government that there are no expanses of million-dollar homes or typical leafy green suburbs in Cowan. No-one has views of the sea or rivers either. These suburbs in Cowan are typical of the authentic suburbs of this country. I speak on this matter today to ensure that the people of Cowan know that one side of politics, our side as the coalition, supports choice, and in particular the choice of constituents to have private health insurance and not be attacked by the Rudd government for making that choice. Although too numerous to mention by name, I will now read a letter from one of my constituents. John of Ballajura sums up the sentiments of the people of Cowan, and I think of most of Western Australia, when he writes:

I am writing to you as one of Western Australia’s 800,000 HBF members and someone seriously concerned at reports that the Federal Government is considering making changes to the Private Health Insurance Rebate in the forthcoming budget.

The current contribution by the Federal Government towards health insurance premiums is absolutely vital in keeping private health cover affordable for people like me.

Any change to the Private Health Insurance Rebate, which makes health insurance more expensive, will encourage people to drop their cover, place additional pressure on our public hospitals and lead to higher premiums for those who keep their cover.

Many of us make significant personal sacrifices in order to pay for our health cover. We believe that we are doing ‘the right thing’ by taking responsibility for our health instead of depending on an already stretched public system.

As my Member of Parliament I implore you to speak up for me, and the thousands of other Western Australians with health insurance, to ensure that the Federal Government honours its pledge to retain the Private Health Insurance Rebate in its current form.

I am unashamedly in support of private health insurance and in support of free choice in this country. The coalition has always been in support of the health system in this country, and the best possible health outcomes. That is why we support the retention of the private health insurance rebate and support its retention with an effective health measure being the increase in the excise on tobacco. This of course is yet another example of the multifaceted approach the coalition adopts with health. We can get to a better health outcome by having a strong private health option. We can get better outcomes by increasing the excise on tobacco and still achieve these things in a financially responsible manner. If the government adopted our position then the Prime Minister’s pre-election promises and assertions about not changing the private health rebate system could be maintained—that is, of course, if he ever intended to keep his word on this matter. The actions of the government will now be on display for all to see. Back this amendment and keep faith with the Australian people in at least one area, or oppose this amendment and have Rudd Labor seen as the enemy of private health, the enemy of free choice, the enemy of aspirational people and those who make sacrifices to afford private health cover all over Australia.

Bruce Billson (Dunkley, Liberal Party, Shadow Minister for Sustainable Development and Cities) Share this | Link to this | Hansard source

What we are discussing tonight with the Fairer Private Health Insurance Incentives Bill 2009 and related legislation is certainly not an honest attempt by a government to implement its policies. This is a dishonest government that went to the electorate on an issue known to be sensitive, of great interest and a vote-influencing subject in the electorate. It promised over and over again, gave solemn undertakings, that things would not change in relation to the private health rebate and here we are, a year and a half in, and all of that has been junked and the dishonesty is laid bare on the nation’s parliament tonight as we debate what is a stunning betrayal of the trust of voters of Australia and a clear example of this government doing anything, once it is elected, to implement ideological agendas.

The Minister for the Environment, Heritage and the Arts, Peter Garrett, said, ‘We’ll just get elected and do what we really want afterwards.’ Never has such open honesty and transparency been laid as bare as it has been tonight. This is exactly what has happened. Many electors not only in the electorate of Dunkley, that I am proud to represent, but right across Australia actually took the Rudd opposition at that time at its word that it would not do a hatchet job on the incentives for Australians, not just high-income Australians but Australians right across the board, to commit their own resources to taking out private health insurance.

The reason this affects everybody is that a change in the balance, in the equilibrium, of our dual-track health system that recognises and resources both the public system and the private system reverberates right throughout the system. Tonight it may not be a $64,000 question for the people of Dunkley, but the private health insurance dollar certainly is an issue for 64,000 Dunkley residents who will pay a heavy price for the Rudd government’s betrayal and clear dishonesty in relation to private health insurance in what I believe is an ongoing attack on private health in this country. A lot of words have been said by Rudd government ministers and their very compliant Labor members of parliament, sticking precisely to the lines given to them by the executive. But there is a set of words you would not have heard from the minister herself in this debate, or from any of the Labor representatives who have stood up to parrot the lines given to them. None of them have said, ‘We support private health.’ They have not uttered those words. They do not believe those words. And here we are, looking at a second attack on private health—after we had the earlier Medicare levy surcharge reforms last year, we now have these private health insurance bills before us tonight.

The reason this is so significant to the people of Dunkley is that more than 15,000 families have chosen to put some of their own resources into taking out private health insurance. A further 17,000 single adults with private hospital and general treatment insurance are also part of the Dunkley community. They recognise that the more people who participate in the private health system, the more its insurance utility will benefit all. So if you start picking people out of that system, you are leaving a smaller pool to cover the risk and the costs of maintaining support and services for those who remain. That is why this is such an ill-conceived budget measure. Not only will it push up the cost of private health insurance by reducing the number that have taken out cover and therefore the coverage pool that supports those services; it will also discourage people from directly providing for their own health costs. It will add to pressure on waiting lists in public hospitals and the health system, and it is just plain dumb.

Why on earth, when we are looking for more resources in the health system, would we not say, when any Australian is prepared to put 10 of their own dollars in, that the $3 to support that from the government is a sound investment? You take the $3 away and the risk and the highly probable outcome is that people will take their $10 away. What you end up with is a net reduction in the resources in the health system of Australia to care for our increasingly ageing population, and this is just dumb. Incentives are about encouraging behaviour, and the behaviour here is to look the Australian people in the eye and say, ‘We encourage you to commit some of your own resources towards your own health care, and we will provide some encouragement for that’. In addition, those people continue to pay their Medicare levy. They continue to make a contribution through their levy payments and through their taxes to the public health system but we welcome and encourage their additional contribution to the private health system. All the Dunkley families and individuals that make these personal sacrifices to maintain private health cover will be faced with higher insurance premiums after the Prime Minister categorically broke his election promise not to change the health insurance rebates and instead slashed them savagely in the recent federal budget.

This further step by the Rudd government in dismantling the benefit available through the 30 per cent rebate on private health insurance in this budget will have an immediate impact on at least 1.7 million Australians, or 10 per cent of the population. That impact will flow on to private health cover for those that are not immediately directly affected because of the smaller insured pool, and also those in the pool are more likely to be those individuals with higher health care needs. That will mean premium increases for everybody. On top of that, those directly affected will have that burden of an increase in health costs of up to 42 per cent if they are not eligible for this rebate, while those forced to abandon their insurance will face a tax increase through the Medicare surcharge levy of about 50 per cent. But every Australian will eventually pay for this reckless decision. It is a reckless action by a government that is careless about honouring its promises and has lost control of the public finances. The budget changes will mean people will drop out of health insurance. They will join the queues of people waiting for treatment in public hospitals while those who keep the insurance will have to pay more.

Prime Minister Rudd was not honest with the Australian people. He promised that this would not be changed; he promised it over and over again and now he has stooged everybody. He stands condemned for that action, not only because of the appalling betrayal of public trust but also for the consequences that will flow from it. He promised he would not touch the rebates for private health insurance but he was not honest in making that promise. This commitment was shattered in the budget and we will all end up paying the price. So, I have illustrated the impact on those with private health insurance, through the additional costs for that insurance, and for those that may choose to opt out.

Some people think this is an ideological bent when public policy advocates have over and again recognised that our health regime needs both a vibrant and energetic public system and a vibrant and energetic private system. When this last attack on the threshold and the Medicare rebate was before this parliament we were reassured in speeches by the minister that any suggestion that there would be any messing with this system was not right. She said:

The government has committed to maintaining the private health insurance rebate, which provides support to the private health sector to the tune of approximately $3½ billion a year.

She went on:

Contrary to some of the overblown contributions from those opposite, Labor is far from throwing the private health sector out into the cold. In fact, the government has expressly made it clear that it believes the old paradigm of a split between public and private health systems is no longer a viable policy perspective if indeed it ever was.

Minister Roxon went on to say:

We have also committed to maintaining the Lifetime Health Cover measure.

That was less than a year ago and that undertaking has not been kept. We had promise after promise in the lead-up to the election designed to stooge the Australian public and mislead voters that this benefit would stay. The government has adopted the Milli Vanilli minister for the environment option. He said, ‘Let’s just get in and then we’ll do what we really want afterwards.’ And here we are where we are today.

In my remaining time let me make one other point. A couple of years ago Peninsula Health, in the Dunkley electorate, got a touch-up from the state government. They were told they were not doing enough to pull in revenue from privately insured patients receiving care in the public hospital. They were told they were underperforming in bringing additional resources into the health system through the Frankston Hospital by treating privately insured patients whom they could then bill. The Peninsula Health financial report shows that in 2004-05 there was $5.842 million in additional patient fees brought in through acute patients. In 2006 it was a little over $6 million. Then the touch-up came. After 2005-06 they were told, ‘You are not doing enough to draw in privately insured revenue to prop up the resources of your public hospital. Go to it.’ That revenue stream of a little over $6 million became $9.14 million in one year—nearly double.

I illustrate this point to emphasise that, when private insurance is compromised and made more difficult and less attractive, not only does the private health system suffer but the balance between the public and private health systems suffers. Here is a classic example of privately insured patients not only supporting private health and public health through their Medicare contributions; through their premiums they are also enabling hospitals in the public system to attract additional revenue by providing services to privately insured patients. This is a disaster of a measure. It is a dishonest action by a government that has misled people with its election reassurances. We have seen two instances of private health maybe not being ‘left out in the cold’, as we were assured by Minister Roxon, but, gee, there is sure an ill and chill wind blowing over private health. All of us must remain vigilant to make sure the ideology of the Labor Party does not see an end to private health, because that is a bad health outcome for all Australians.

Peter Lindsay (Herbert, Liberal Party, Shadow Parliamentary Secretary for Defence) Share this | Link to this | Hansard source

All along, Labor have had a track record of hating private health insurance. They did go to the last election, as the member for Dunkley indicated, promising that there would be no change to the arrangements for private health insurance. But why are we surprised when we now see the Labor Party break a number of promises they made to the people of Australia? The people of Australia must be getting a bit cynical now. They were sold a pup. They were given an expectation and that expectation is not being delivered on. When we see this class warfare and politics of envy and so on operating within the government, it is frightening. Only yesterday the unions floated the idea that the salaries of company executives should be limited by government decree. I am not sure how you would do that, but it certainly does not encourage the best, brightest and most capable to remain working in Australia.

It has always been the Labor Party’s philosophy to bring people down to a common denominator. We are seeing that in private health insurance changes and in what the unions are proposing in relation to how company executives should be remunerated. That is sad. I guess it comes back to the fundamental philosophies that define the Labor Party and the coalition. The Labor Party’s view is to legislate to do all things to make people equal with one another. The coalition, on the other hand, believe that we should give everybody the opportunity to be equal. It is a fundamental difference in our philosophies, because people are not equal. People will always be different. You cannot make people equal when they cannot be equal, but you can give them equal opportunity. You can allow them to do well and you can support those who do not have the capacity to do well. That is what the Australian Labor Party should be thinking deeply about.

Many people are also very concerned that the Rudd government promised to fix the hospital system, particularly in my patch in Townsville in North Queensland. Now there is a lot of money coming out of the health system—I will explain that in a moment—to pay for Labor’s reckless spending, but that is putting pressure on the health system, which is already groaning under the weight of to few beds, too few health professionals and so on. I am reminded that the Prime Minister made a commitment to the Australian nation that, if the health system was not fixed by 30 June this year, he would take it over from the states. The 30th of June is going to be a very interesting day because the health system is not fixed, and I would take a bet that there will be another broken promise at the end of this month—that the Prime Minister will not move to take over the hospital system. Again he will disappoint all Australians, whom he gave such a great expectation to in relation to this issue.

The beauty of private health insurance is that it gets people paying a component of their health costs. People will voluntarily pay a significant sum of money towards the cost of their hospital cover, which means that the government does not have to meet that cost. Throwing people out of the private health insurance system imposes higher costs on the public hospital system and on the government. It is a lose-lose situation. I am reminded that many of the people with private health insurance in Australia are pensioners. They scrimp and save at times in their lives when they really need private health insurance. Effectively, the government is taking a measure to increase the cost of private health insurance for those people who really need private health insurance to access private hospitals. It is a very bad measure all round.

We will also see that the people who drop out of private health insurance because of this measure are those who are least likely to want to use the facilities of a private hospital. People who are most likely to use the facilities of the private hospital will remain privately insured.  All that means is that you will lose the healthy ones and keep the less healthy ones and premiums will rise to cover the cost of the less healthy cohort who remain in private health insurance. Can’t the government see that? Can’t they see what they are doing to pensioners who keep private health insurance as a necessity? Can’t they see that they are putting premiums up for pensioners? No, it is ideological; they do not want to see it.

I have a major private hospital in my electorate which is not for profit—which means that it is not for loss. The private hospital concerned needs a critical mass. If the percentage of people with private health insurance in the Townsville population drops below a critical level—a scenario which is likely to happen when the Rudd government makes these changes to private health insurance—the hospital will run at a loss. What will that mean for my people in town?

It should be borne in mind that hospitals in regional Australia offer a wider range of services than would otherwise be available in a hospital in a capital city. That stands to reason. They have to because there is not a high concentration of population to support specific specialties which you can access in a capital city. Some of the specialist health services provided by private hospitals in regional Australia have to be subsidised by other services. The regional hospital offers a wider range of services because the alternative is to put the burden back on the public system, to send patients to Brisbane—it is only 1,000 kilometres away—or, worse still, simply not offer the specialised health services.

The hospital concerned has a specialised health procedure called brachytherapy, a form of radiotherapy where radioactive seeds are inserted, or placed inside, or next to an area requiring treatment to knock off a cancer. It is commonly used very successfully to treat localised prostate cancer. It is available in Townsville, but if this legislation proceeds the way it looks as though it will proceed, the service will no longer be subsidised by other services and we will lose that service in North Queensland. So the Rudd government does regional Australia in the eye yet again. It is very unfortunate.

People living in regional Australia do not deserve to be treated as second-class citizens when it comes to the provision of health services. I am concerned that this will be the case when more pressure is put on the private health insurance system and people opt out of private health cover. There are nearly 70,000 adults in my electorate and 52 per cent of them have private health insurance. It is going to be very interesting to see where that number drops to under this particular measure. It will just mean bigger queues at Townsville Hospital, more frustration and longer waiting times. That will be a bad outcome.

The changes we are debating tonight have been acknowledged by the Australian Private Hospitals Association as a clear breach of election promises made by the Rudd government. I do not think there is any doubt about that. Even the Labor Party would admit that it is a breach of an election promise—they have to. The APHA state:

The changes will lead to a system that is confusing, complex and costly for those millions of Australians who take responsibility for their own health care costs.

On the subject of broken election promises, there is a standout one in Townsville relating to my defence community. The Rudd government promised that Townsville and Darwin would be the first to receive a defence family health clinic. And $33 million was promised. You know, we still do not have one. There are trials being run in other centres but not in Townsville or Darwin and there has been no commitment to start up a family health centre for defence families in Townsville. So we now have a double whammy: we have defence families who are privately insured with the not-for-profit insurer Defence Health. They have been let down by the government’s promises in relation to private health insurance. They are also let down by the government’s promise, not fulfilled, in relation to the family health centre at Lavarack Barracks. I am very disappointed for my people in Townsville. I am very disappointed that the Rudd government has taken this attitude.

I finish where I started. Labor hates private health insurance. The ideologues and the unions believe that we should have a socialised system—a one size fits all. It does not work. It is bad for the country and it removes the choice that people should have in relation to their health arrangements. I will be voting against this measure.

Mrs Bronwyn Bishop (Mackellar, Liberal Party) Share this | Link to this | Hansard source

We all use the health system the most in our lifetime in the last two years of our life. I have never been one who is prepared to say which are the last two years of anybody’s life. About one-half of the cohort of people who are born in a particular year will meet the life expectancy figures, which if I remember correctly are about 83 years for women and about 79 reaching 80 for men. But there are a lot of other people who will pass away in that period—nearly half of them from the cohort.

Private health insurance has always played a very particular and important role in giving adequate health cover to people who want to live a quality life throughout their life. That entails the ability to have choice of doctor and to have ready access to hospitals when they feel the need and when they believe they require that health service. There used to be a long debate about Medicare and whether or not, from our side of the political spectrum, Medicare was the way to go. When I was shadow minister for health prior to the 1996 election I made a very firm commitment on behalf of the opposition, which has remained since then, that we would always support the Medicare system. But we also fiercely said that there was a need for private health insurance and we very fiercely said that the right of people to take out that insurance and to have doctor of choice, and choice of time when they need elective surgery, was a fundamental right of the Australian people. We do not want the United Kingdom system of rationing and dictatorial government saying when you may or may not have medical treatment. We do not want the American system, where the HMOs say when and what sort of care you may have. Here in Australia we have developed something unique.

I also said at the time I was shadow minister for health that it was imperative that we had either a tax deduction or a rebate in place to encourage people with regard to their private health insurance. And it is fair, because everybody pays the Medicare levy—or rather, those over a certain taxable income. But the vast majority of people who pay for their private health insurance also pay a Medicare levy. So they do have right of access to the universal system, but they pay extra because they want that bit more. And that benefits the system as a whole. It relieves the pressure on public hospitals, it makes the private hospital sector viable, and it means that we can have such arrangements as we do for veterans, where veterans are entitled to use the private hospital system, which gives them that special benefit which they deserve.

It also means that doctors are not employees of the state. It means they retain their independent status. That is where we get into trouble with Labor Party governments. Socialism in the area of medicine and many other areas is alive and well in the Labor Party. The Labor Party wants doctors to be subjugated by the state. They want them to be employees of the state, so they can tell them how and where and in which way they will treat patients. But we still have a fiercely independent medical profession, and long may that endure.

In the system that we introduced—which, like Medicare, was universal; it was available to everybody—a flat 30 per cent rebate was chosen, and for a very sensible reason. When we were in government we always strove to see that 80 per cent of taxpayers paid no more than 30c in the dollar top marginal rate. And therefore it was felt that it was fair that 30c in the dollar was a reasonable rebate to be struck. It did not advantage those who were above that 80 per cent of the population, but it was a fair and reasonable figure.

The Labor Party, before they won office, were at great pains to say that they were fiscal conservatives. We have seen that that is not true. But they also said again and again that they would in no way tamper with the rebate, because the rebate matters to people. For instance, in the lead-up to the election on 26 September 2007 Nicola Roxon, the then shadow minister for health, put out a media release:

The Liberals continue to try to scare people into thinking Labor will take away the rebate. This is absolutely untrue.

Really? It was perfectly true. On 20 November 2007, just prior to the election on 24 November, Kevin Rudd, federal Labor leader and member for Griffith wrote to the chief executive of the Australian Health Insurance Association in the following terms:

Thank you for your letter of 29 October 2007 seeking clarification on Federal Labor’s policy regarding private health insurance.

Both my Shadow Minister for Health, Nicola Roxon and I have made clear on many occasions this year that Federal Labor is committed to retaining the existing private health insurance rebates, including the 30 per cent general rebate and 35 and 40 per cent rebates for older Australians.

Federal Labor will also maintain lifetime health cover and the Medicare Levy Surcharge. Labor will maintain the existing framework for regulating private health insurance, including the process for approval of premium increases. Zero per cent premium adjustment is not Labor policy.

I understand Nicola Roxon’s office has also confirmed with you that Federal Labor has no plans to require private health insurance funds to make equivalent payments to public hospitals for patients who elect to be treated as private patients.

I trust this allays your concerns. Federal Labor values its relationship with the private health insurance sector and we look forward to this continuing regardless of the election outcome on November 24.

Yours sincerely,

Kevin Rudd

What is that piece of paper worth? That—rip—absolutely nothing, because it is full of falsities and falsehoods. They went on to continue the falsities. On 25 February 2008, Mr Rudd said:

The private health insurance rebate remains unchanged and will remain unchanged …

On 18 May 2008 Nicola Roxon said:

… we continue to support the 30 per cent, 35 per cent and 40 per cent rebate for those Australians who choose to take out private health insurance.

Nicola Roxon, in a speech to the Australian Health Insurance Association on 8 October 2008, said:

Private health insurance consumers will be able to claim the 30 to 40 per cent rebate and lifetime health cover initiatives will remain in place.

And on 24 February 2009 Ms Roxon said:

The Government is firmly committed to retaining the existing private health insurance rebates.

What is that worth? Ditto—rip—worthless words. Promises broken again and again. What is the point of hearing any utterances from this Labor government as to what they will do once they get into power? Their ideology tells you that they are opposed to private health insurance. Under the previous Labor government, they sent it soaring—it went to coverage of only 20 per cent. In my electorate 74 per cent of voters have private health insurance. Nationally 44 per cent of the population is covered by private health insurance. We built it because we had a series of policies that said we value the contribution of private health insurance, which means we value the contribution to our health system of private hospitals and of doctors who are practising privately, not as government employees. This is what offends Labor.

The bottom line is that this is the thin edge of the wedge. We introduced, through the new tax system, a test that was to be applied for people who were on high incomes and would have to pay a surcharge if they did not take out private health insurance. That was what we called the stick; the carrot was the 30 per cent rebate. That test said that the income used to determine a person’s liability for the surcharge would include taxable income, reportable fringe benefits, reportable superannuation contributions and total net investment losses. But this government has distorted that provision and now extends it to all people who are claiming the private health insurance rebate. Once they have taken out eligible private health insurance they are subject to this test, not because they want to opt out but because we want a punitive test to try and force people who are presently enjoying the 30 per cent rebate into a lesser category of rebate or, alternatively, squeeze them out of the rebate.

In the explanatory memorandum to the Fairer Private Health Insurance Incentives Bill 2009 where it says ‘Singles earning between $75,001 and $90,000 and couples/families earning between $150,001 and $180,000 will receive a 20 per cent private health insurance rebate,’ it should really read, ‘Add back to your taxable income any reportable fringe benefits, whether it is your car or your computer, or if you are a federal government employee your child-care expenses, or if you are an employee of a hospital or a charity the fringe benefits tax component of your salary, and add to that reportable superannuation contributions and total net investment losses,’ which is the first attack we have seen for a long time on negative gearing. When the explanatory memorandum talks about a single person on an income between $75,000 and $90,000, it does not mean taxable income; it really means gross income, with a few exceptions. It is a deceptive way of introducing a new and punitive way of moving people off private health insurance.

We will see more stories coming out of what happens to people in the public sector, which is so run down by state governments. The federal government has said, ‘If the state governments don’t reach a reasonable level, we’ll step in.’ They have stepped in all right. They are claiming savings to their federal budget by transferring costs on to state budgets for which they do not have to take responsibility. So the savings that they claim in the federal budget can become a cost on a state government budget, yet they try to say they will not intervene, for the simple reason that they think they are making progress. Progress? Have you read about the state of hospitals in New South Wales, where the problem of mothers giving birth to babies in toilets is not a singular occurrence but one we see repeated many times? And have you read stories of hospitals that are so understaffed and so lacking in resources, yet there is no intervention by the federal government, who attack the private sector and private health insurance? This is simply a case of a broken promise and it should be trumpeted in the headlines, and yet the funny thing is that it does not seem to happen. There is a fundamental broken promise with regard to improving health care generally and a fundamental broken promise in any word from either the Prime Minister or the health minister.

This is a sorry day indeed. But I was very proud to see that in his reply to the budget the Leader of the Opposition firmly stated that the opposition will be voting against this measure in the Senate. We will be voting against it here in this House, where the government has the numbers so it will no doubt pass. But we will be voting against it firmly and resolutely. And when it goes to the Senate we will be voting similarly. We will not be resiling from that position. This is a core issue for Australia and for people who believe in equity and fairness and choice—in choice of doctor and choice of method of health care. I proudly say I will be one of those voting against this legislation.

Scott Morrison (Cook, Liberal Party, Shadow Minister for Housing and Local Government) Share this | Link to this | Hansard source

The titles of these bills, which refer to ‘fairer’ private health insurance incentives, prove beyond doubt that just because Labor says something does not mean it is true. The truth of the Fairer Private Health Insurance Incentives Bill 2009 and related legislation is that it is going to slash the rebates that are available to families and individuals. It is going to slash those rebates from 30 per cent down to 20 per cent, from 30 per cent down to 10 per cent and from 30 per cent down to zero. This legislation shows yet again that in this budget Australians are paying the price for Labor’s reckless spending. This is a government that has lost control of the budget. It has lost control of the finances and we have a debt that is mounting at exponential levels on a daily basis. So we have before us this legislation, which is solely designed to try to attack private health insurance and to attack those who have sought to take some responsibility for their own healthcare needs and reduce a burden on the public system for the benefit of the whole system. These are the people the government is seeking to attack in this budget and by this measure in particular. They are the new ‘Rudd rich’, as the Prime Minister might want to refer to them—the groups of people he now deems unworthy of any support or any recognition of the sacrifices they make or the costs they incur. I note in particular that the income levels in this measure mean it will impose an even greater burden on my home city of Sydney, where incomes are, frankly, higher. They are higher because costs are higher. The cost of living in a major city like Sydney is higher; therefore the burden of this initiative will fall even more heavily on families in Sydney than in most parts of the country.

The measures in this legislation represent the second wave in Labor’s assault on private health insurance. We saw the first wave of that assault come in last year’s budget, when Labor sought to adjust the thresholds. This legislation is not about the global financial crisis, as the government would have you believe. It is not even about the Australian recession, which the government do not seem to want to talk about. They want to talk about global factors but they do not want to talk about the real situation here in Australia. What this legislation is all about is Labor’s hatred of private health insurance. As the previous speaker, the member for Mackellar, and all the other speakers on this side of the House have argued so well, this is all about Labor’s hatred of private health insurance. It is in their DNA. It is in their platform. It is in their policy. It is in their statements. It is in their words. It is in their deeds. And now we are going to see it in their debt. This is what the Labor Party stand for. Even though they promised they would do something differently, and even though they put that in writing, we should really not be surprised as we see this second wave of the assault come upon us.

There is a real difference between the coalition, who sit on this side of the House, and those who sit on the government side. Around health, the different is that when the coalition look at how health should work in this country we look at all elements of it. We look at the role the private sector can play. We look at the role the public sector can play. On this side of the chamber, we do not look overseas, with pining, towards other systems. We think the system we have here is pretty good. It actually gets the private and the public sectors working well together. Those on that side of the House look to the United Kingdom and pray for the day when they have complete public control of health, right across the board, and they have doctors, nurses and everybody answering to the almighty Prime Minister. That is not a system or a vision for health that we share on this side of the House.

The vision we have for health is of an environment where the private sector, the independent practitioners and the public sector all work together to provide an effective health system and where there is a system of incentives which enables people to take on responsibilities for their own health care. In government we provided for that environment. We provided the encouragement for that environment. That encouragement was in the form of a system that included the 30 per cent rebate, the Medicare levy surcharge and Lifetime Health Cover. Over the period of our government, particularly from the commencement of those initiatives, and from the time we left office, the take-up of private health insurance rose from 30 per cent to 43 per cent. In my electorate, that figure today is 72 per cent. That does not surprise me because my electorate of Cook, in Sydney’s Sutherland shire, is made up of people and families who have made a habit throughout their lives of trying to take responsibility for themselves and their families and trying to support others around them. They carry their own weight and they also seek to carry the weight of others. It is an electorate where people have started small businesses and worked hard for a living, and as part of that ethic they see a responsibility to have private health insurance. These people are being punished by this government through these measures.

As a result of the measures we introduced and our encouragement of that type of system, more than half of hospital procedures today are done in private hospitals. So the actual attempt to encourage a system that moves us away from private hospitals into public hospitals defies belief. Despite those opposite trying to advance the argument in this debate that there will be no decline in private health insurance take-up, as we heard earlier from one of the government speakers, Treasury claims that 25,000 will drop their cover. That is the government’s number. That is not the opposition’s number. It is not the number that is coming from the health insurance industry. That is the number that is coming from the government. With a decline of at least that number—it could well be more—we will see an increase in premiums. That will especially affect older, senior Australians, particularly self-funded retirees, who have spent their life paying insurance premiums and who will be hit with higher premiums as a result of these measures and the flow-on of the impact of others falling out of the system.

It will also put increased pressure on our public hospital system, as the member for Mackellar noted. Waiting lists in New South Wales hospitals currently stand—at the end of March—at 62,890. That compares to 58,839 just 12 months ago. As at the end of March, there are 1,152 people waiting at Sutherland Hospital in my electorate, and just across the river, where many Sutherland shire residents go for surgery, there are 1,197 people waiting at St George Hospital.

The Rudd government was the government that said it was going to fix public hospitals. It was going to end the blame game, and it was going to fix public hospitals—and it was going to do all of that by 30 June this year or it would take it all over. It would take it all to a referendum, the buck would stop there and it would bite the bullet. That is not what we are seeing from this government but I should not be surprised because this is not the only promise that has been broken by this government when it comes to these matters. On 20 November, as we just heard, in a letter to the Australian Health Insurance Association, the then Leader of the Opposition and now Prime Minister said, ‘We will maintain the existing private health insurance rebates.’ It was in black and white. He even put it in writing. It is interesting to note that, prior to the budget, its chief executive, Michael Armitage, had said:

We can only hope, like all Australians, that he is going to honour that part of his promise. But I guess one will have to wait and see.

Well, they did wait and see and that was false hope. Like all other Australians, we see that it is false hope to put your trust in a government that would so freely and brazenly break a promise that it so freely gave prior to the election, even going to the point of putting it in writing. On 26 September the now health minister said:

On many occasions for many months federal Labor has made it crystal clear that we are committed to retaining all of the existing private health insurance rebates. The Liberals continue to try and scare people into thinking Labor will take away the rebate. This is simply untrue.

Once again we see that the government have no ticker for the truth. They have broken this promise and they are breaking other promises. In the budget they are breaking promises in relation to the Medicare safety net, particularly in areas that I have highlighted already in this place relating to IVF treatment, obstetrics, ultrasounds, cataracts—and the list goes on and on. The Deputy Prime Minister even had the gall to obtain the signatures of more than 1,300 citizens saying that that was a cruel measure that should be stopped. I even learnt today that the now Treasurer also had a petition to go with those of the minister for agriculture and the minister for small business. The have all tabled submissions and they have all rolled over and broken their promise.

The Prime Minister says the buck stops with him. The only bucks the Prime Minister seems to be accumulating are borrowed bucks for his budget black hole and deficit. This is a budget that has been dripping with spending—some 28.6 per cent of GDP, the highest on record—and this is the measure that they think they need to put into this budget. The coalition do not want to add one more red cent to Labor’s debt and deficit, so we put forward a constructive proposal to increase the excise on tobacco by 12½ per cent to pay for the cost of the government not having to go forward with this measure. But once again they were not interested. The Rudd government’s approach is: ‘It’s our way or the highway. We’re not interested in discussion. We’re not interested in having any engagement, whether it is on this legislation or any other bill before this House.’ It is an arrogant approach to government, which the people of Australia are waking up to. They are now seeing both faces of this government and they are seeing both faces of this Prime Minister and they do not like what they are seeing. We do not like what we see in this bills package and we will not vote for it.

Stuart Robert (Fadden, Liberal Party) Share this | Link to this | Hansard source

I rise to stand up for the hardworking residents of my electorate, the mums, dads and kids of the northern Gold Coast, by voting against the bills package that Labor has put forward. I stand here with great pride to vote against the Fairer Private Health Insurance Incentives Bill 2009. I can only imagine the embarrassment of the government and their backbenchers. For those who do not know how parliament works, and there are many such people in the country, the whips decides on a speaking list and that determines the fair and orderly working of the parliament. I look at the speaking list in front of me and I see a long list of members of the Liberal and National parties—the coalition—defending their members as I stand here today to defend the 53,168 members of the electorate of Fadden—55 per cent of my electorate covering 73,392 people—who have private health insurance. But as I look at the speaking list, which tells me the order in which people will debate and stand up for what they believe in in this House, and look at the Labor side of the page, one can only imagine my surprise when I see it is blank. It is absolutely blank. There is no-one speaking.

The bill introduced before this one was the Fair Work (Transitional Provisions and Consequential Amendments) Bill 2009, through which Labor are looking to monumentally screw the workforce of this nation, and the list of their speakers is as long as your arm. But when it comes to standing up for the health of hardworking Australians not one is there. There is no-one speaking here. The minister introduced it and then there is no-one else, not a sausage. If I can use those famous words of Toyota, there are bugger-all speakers on behalf of the government—none. Do they care so little about the private health insurance issue, do they care so little about insurance needs and do they care so little about the health of Australians that not a single member of the government has the courage of their convictions and has the ticker for the truth to come in here and defend the health of their constituents? I find it outrageous that not a single member of the governing party has the courage to stand here and defend their constituents and their healthcare needs.

I am disappointed that the government has lost complete control of the nation’s finances. I think Australians are becoming deeply anxious about the level of control of the finances that has indeed been lost. What I am grossly disappointed about is that, because it is looking as if peak debt is rising to $315 billion, the Labor government are now seeking to pull some of that reckless debt back by sacrificing the health of Australians on the altar of their reckless spending. Their changes are seeking to put in a means test for singles at $75,000 and for families at $150,000 whereby the public health insurance rebate, the current 30 per cent rebate, will be gradually decreased with different thresholds for children and decreasing thresholds as income rises.

If you look at what the Labor government said prior to and since the last election, you will see that four times the Prime Minister made it clear that he would not do this. On 24 August 2007, in an interview with Leon Byner, the Prime Minister was asked:

Lorraine wants to know if you are going to take off the rebate for private health funds which currently the government supports, that’s the 30 per cent rebate we are talking about.

The Prime Minister said:

Absolutely not.

In a letter to the AHIA on 20 November 2007, the Prime Minister said:

Both my Shadow Minister for Health, Nicola Roxon, and I have made clear on many occasions this year that Federal Labor is committed to retaining the existing private health insurance rebates, including the 30 per cent general rebate and the 35 and 40 per rebates for older Australians.

On 25 February 2008 in a press conference in the Prime Minister’s courtyard, Mr Rudd said:

The private health insurance rebate remains unchanged and will remain unchanged.

Still on 25 February 2008, he reiterates it. Three times the Prime Minister stood there, unequivocally saying to the nation, ‘We will not change this.’ His Minister for Health and Ageing made the point four times that she would retain the health rebate. On 26 September 2007, just before the election, she said:

On many occasions for many months, Federal Labor has made it crystal clear that we are committed to retaining all of the existing Private Health Insurance rebates, including the 30 per cent general rebate and the 35 and 40 per cent rebates for older Australians … The Liberals continue to try to scare people into thinking Labor will take away the rebates. This is absolutely untrue.

That is her first unequivocal statement. On 18 May 2008, on Macquarie radio, the health minister said:

We continue to support the 30 per cent, 35 per cent and 40 per cent rebate for those Australians who choose to take out private health insurance.

On 8 October 2008, we had the third unequivocal statement by the health minister:

Private health insurance consumers will still be able to claim the 30 to 40 per cent rebate and the lifetime health cover incentives will remain in place.

Finally, on 24 February 2009, she told the Age:

The government is firmly committed to retaining the existing private health insurance rebate.

That is what Minister Roxon told the Age. There we have three unequivocal statements by the Prime Minister and four equally unequivocal statements by the health minister—seven statements in total—that the private health insurance rebate would not be touched. You would think, if a prime minister and health minister were worthy indeed of their word, they would only have to say it once, but they told the nation seven times that their vote was safe with Labor. They looked families in the eye and said, ‘The health of your families is safe with us.’ Prior to the election, the Prime Minister said to the people and the families of Australia, ‘You vote for me and the health of your families is safe’—reinforced by seven firm statements. The result: nothing short of a bright shining lie.

Labor hate private health insurance. That is why everyone was so wary of their motives and intent, why they were questioned so diligently prior to the last election and since and why there was a degree of circumspection and cynicism. Seven times they said it was fine. Seven times they lied. In Labor’s policy, in their platform, in their pedigree, in their DNA, in their deeds and now in their debt, they hate private health insurance with every part of whom they are. It is ideologically driven. They simply want everyone to be in the same public system.

Let me remind this duplicitous government of the state of our public health system—the system that Prime Minister Rudd said he would take over 18 months after his election if it was not fixed. Queensland Health currently has over 36,000 people on the waiting list. There are a further 159,000 waiting to get on the waiting list. How that could possibly be construed as ‘fixed’ is beyond me. On the Gold Coast there is only one public hospital—Gold Coast Hospital. Right now, if you go to Gold Coast emergency—the biggest emergency department of any Queensland Health hospital—you have a 45 per cent chance of waiting eight hours in emergency to be seen. In this environment, this government wants to take away the private health insurance rebate which, on its own estimates, will lead to tens and tens of thousands of Australians leaving private health and, therefore, going into the public health system that is already overloaded and stretching at the seams. The question is: how has ideology become so bad as to overtake and confound common sense?

We do not seek to frustrate the government’s budgetary process. Whilst we are appalled at the debt, whilst I am personally shocked at the amount of debt within 18 months—from a massive surplus to the dreadful debt position we are in—and whilst it appals every fibre of who I am, I do understand that the government needs to run the country, however badly I think it is doing it. Hence, in the budget reply, the Hon Malcolm Turnbull, the Leader of the Opposition, proposed a 3c tax per cigarette—a 12.5 per cent across-the-board tax—to make up the revenue that would be lost. Yet here we have a perfectly sound opportunity to provide a tax to further dissuade Australians from using cigarettes, which are a burden on our health system, but the government chose to ignore it to continue its ideological assault on health. There is nothing that can be done with the bill except to vote against it. For the sake of the 73,000 Australians covered by private health insurance in the great electorate of Fadden on the northern Gold Coast, in good conscience I can do nothing else.

Alex Hawke (Mitchell, Liberal Party) Share this | Link to this | Hansard source

I rise tonight to speak on behalf of the 76 per cent of electors within my electorate who have private health insurance. I take this legislation before the House tonight as something that is very serious for those people and indeed for people with private health insurance around the country. This legislation and the series of legislation that we are seeing before the chamber day after day in this place goes to the question: what kind of society would we like to see in the future here in Australia? And, to ask that question in the area of health: as a parliament today, what kind of society do we envisage in the future and what kind of system will take care of the future health needs of so many Australians?

It is bills such as the wrongly titled Fairer Private Health Insurance Incentives Bill 2009 and the cognate bills that we are debating here tonight that to me form part of a great problem for us: this government unequivocally hates private health. That is a big problem for Australia’s future, because private health is an integral part of the system that we have created here in Australia that provides us with such a great standard of living and will continue to sustain so many people in the future. We have avoided so many of the problems of the United States of America and other countries not just because we have a Medicare or public health system but because we have a recognition that private health is so important and because those people who can pay for their health insurance continue to do so. That is why legislation such as the legislation before us tonight is so retrograde—it undermines the system that has provided us with such great-quality health care. It is legislation that will see a diminishment of private health in Australia, that will make it harder for people to sustain their private health arrangements and continue to maintain their current level of health care.

As one of the youngest members here, I can report to this House that, anecdotally, the first reaction of the friends and people I have spoken to, upon hearing on budget night that the government proposed to change the rebate system for private health, was: ‘Well, if it’s going to become more expensive, I’m going to drop my private health insurance. I’m going to lower the amount that I pay to cover myself. I’m going to seek a cheaper form.’ That will undoubtedly be the reaction of many people. Once the government penalises those who have made arrangements for their own health care, that will be a common reaction. That will, of course, mean a greater load on the public health system—a greater load on those who can afford it least.

The member for Fadden quite rightly pointed out that not many members of the government have spoken in relation to this legislation. I think he made some excellent points about why that was. I want to record that I think it is quite right to say that very few members of the government are willing to show their faces here today in this chamber to support private health. After visiting recently in my electorate the North West Private Hospital, which is due to open in October, I can confirm that this fantastic facility, which has 10 state-of-the-art operating theatres, is perhaps going to be one of the most beneficial medical facilities in western and north-western Sydney. I can tell this House that not one state or federal health minister was willing to come and open this facility.

My understanding is that the facility cost a mere $145 million—$145 million for a 170-bed hospital with 10 state-of-the-art operating theatres—and was fully equipped for just an additional $90 million. To me that seemed a surprisingly small amount of money, so I asked the health facilitators, the operators of the joint venture, that have provided this wonderful facility within my electorate: could this be done in the public sector? They advised me that they did not believe there could be a way of building such a state-of-the-art facility within the public sector for less than double the cost.

I record that here tonight just to note that we ought not to view private health as some sort of enemy of the public health system. We ought not to view those people who seek to make arrangements for their own health care as somehow problematic, as causing us an inconvenience or as seeking to undermine the public health system. Indeed, they are not. The people who choose to have private health insurance to pay for another form of health care are assisting the public health system. They are making it easier for people to get ahead. They are providing us with a system where people who cannot afford their own health care can get the treatment that they need.

So legislation such as today’s, which seeks to penalise or treat in a punitive way people who have made provision for themselves, is, of course, retrograde legislation. It will not advance the cause of health care in this country. It will take it backwards. I think all members of this House, if they were being up-front, would acknowledge that, if we saw a diminishment of private health, we would also see a diminishment of the public health system. Any measure, therefore, which helps private health will also help the public system. That is one of the great ironies and the great warning signs that we need to take note of in this place.

When we think about this legislation and why we are here tonight, it is very important to note that we are here as a result of a broken promise by the government. For many months as a new member of this place I heard the trumpeting of the government about how they had met all of their election commitments and the continual paying out of John Howard as someone who somehow did not meet his election commitments, who did not deliver on what he promised. And yet here we are tonight, after so many promises and complete guarantees from the Labor Party when they were in opposition about this health insurance rebate system. It is absolutely galling that we find ourselves in this situation, with the Labor Party directly breaking an election promise, an election commitment, to the Australian people.

It is all the more important that we note tonight that the Prime Minister, when he was opposition leader prior to the election, committed on several occasions to the private health insurance rebate. He made that clear. In a letter to the AHIA on 20 November 2007, he wrote:

Both my Shadow Minister for Health, Nicola Roxon—

who is now the minister for health—

and I have made clear on many occasions this year that Federal Labor is committed to retaining the existing private health insurance rebates, including the 30 per cent general rebate and the 35 and 40 per cent rebates for older Australians.

This is not the only example. I will not take up the time of the House with all of the examples, because they are numerous.

Luke Hartsuyker (Cowper, National Party, Deputy Manager of Opposition Business in the House) Share this | Link to this | Hansard source

Very numerous!

Alex Hawke (Mitchell, Liberal Party) Share this | Link to this | Hansard source

They are numerous, as the member for Cowper rightly points out. They went out of their way to assure every Australian—whatever their concern, whatever their level of private health insurance—that in office they would not change the private health insurance rebate system. They gave that guarantee deliberately. They gave it so that all Australians in voting for them would feel comfortable that nothing would happen to the private health insurance rebate system. Yet, here we are tonight. In my view it is part of the Robin Hood rhetoric that we have heard constantly from the government—taking from the rich and giving to the poor.

However, they seem to forget something. They forget something that is completely and utterly significant in this debate. I want to record it on behalf of the one million Australians who live in households where the annual income is less than $26,000 and who have private health insurance. I want to state that one more time. There are one million Australians who live in households where the annual income is less than $26,000 and who hold private health insurance. So the contention that private health insurance is somehow something for the rich, something that is the purview of people living in the land of plenty, is completely false. The Robin Hood rhetoric and narrative that has been developed by the government is also false. It is a smokescreen for the fact that they are breaking promises to pay for the debt they have racked up on behalf of all Australians. Indeed, that debt has been racked up.

When you look at the hypocrisy we have seen in these measures, it is important to note that there are some 11 million Australians with private health insurance. This is not something for us to be alarmed about. This is not something about which for us to think, ‘Well, how do we encourage people back into the public health system?’ If you were seeking to destroy private health and force people back into the public health system, the measure before us tonight would be a good start on that road. It would be a way to make an incremental change. That is why I am happy and comfortable tonight in opposing the legislation before the House. We ought not take steps down the path towards dismantling the private health system. Where people choose to invest their capital in their own health care we ought to encourage and reward them for doing so. Their health is important.

It is not right for us to have committee after committee. I saw last night the health and ageing committee report on obesity in this country. There is an easier way than having government reports and government committees looking into obesity—that is, to encourage a system where more Australians take more care for their own health. Indeed, that is what a private health system does. Eleven million Australians think it is valuable for them to invest part of their capital in looking after their own health. What could be wrong with that? In fact, there is nothing wrong with that. We ought to encourage and reward that in this place. It gives me nothing but pleasure to support the 76 per cent of my electorate who have chosen private health insurance and who continue to value a system where we have a strong private health sector and a strong public health sector. I have no hesitation in opposing this legislation.

Luke Hartsuyker (Cowper, National Party, Deputy Manager of Opposition Business in the House) Share this | Link to this | Hansard source

I welcome the opportunity to speak on the very important Fairer Private Health Insurance Incentives Bill 2009 and related bills before the House. We have a health system that depends on the interface between the private system and the public system. Without the private sector, the public system could not cope with the demands on its services. Without the public system, there would be no safety net to ensure that people got the medical care that they needed regardless of their ability to pay. We have a system that uses a combination of price signals and waiting lists to regulate its operation. One fallacy in our health system—and there are many who believe it—is that health is a free service. Nothing could be further from the truth. Health is not a free service. It is a very expensive service. It is a huge drain on the budgets of our federal and state governments. It is a service that is delivered by highly skilled and highly trained professionals, at great cost to the community.

The reality is that the members opposite have a pathological hatred of private health insurance. This legislation represents a preliminary step on their quest to dismantle the private health insurance system. They want to ensure equity. They want to ensure equity by herding everybody into the public system, a system that just would not cope under the load. It may sound illogical, but that is Labor ideology at work—we will get equity by creating a system that will ultimately collapse under the load! In my electorate of Cowper some 32,900—or 35 per cent of those in the electorate—have private health insurance. Cowper is not a wealthy electorate. It is one of the lower socioeconomic status electorates in the country, yet 35 per cent of people in the electorate have elected to take out private health insurance. Many people come up to me and ask, ‘What is going to happen as a result of this legislation?’ They say: ‘I can’t afford to not be privately insured. The hospital waiting lists are too long. But I can’t afford to pay more for premiums either.’ They feel very concerned by this legislation. They are very worried by the government’s agenda to wind back private health insurance. This legislation represents a preliminary step along that road.

The Rudd government is slugging people with private health insurance to help pay for its reckless spending. All those retaining their private health insurance will ultimately pay higher premiums, and those dependent on the public system will face longer waiting lists. Those earning over $75,000 will face higher premiums and a loss of their rebate. As I said, for the uninsured as well this legislation is bad news because the length of the waiting list will increase.

As the previous speaker said, the reality is that many people take out private health insurance despite being on low incomes. This legislation represents an instalment on one of Mr Rudd’s broken promises. I note that he wrote to the AHIA on 20 November 2007 and said:

Both my Shadow Minister for Health, Nicola Roxon, and I have made clear on many occasions this year that Federal Labor is committed to retaining the existing private health insurance rebates, including the 30 per cent general rebate and the 35 and 40 per cent rebates for older Australians.

Mr Rudd, in the Prime Minister’s courtyard on 25 February 2008, said:

The private health insurance rebate remains unchanged and will remain unchanged.

Roxon told the Age on 24 February 2009:

The government is firmly committed to retaining the existing private health insurance rebates.

But the reality is that Labor hates private health insurance and is looking for a way to finance its spiralling debt, and cutting out private health insurance rebates is one way of achieving that. The coalition put forward an alternative proposal which would retain the current arrangement but fund it through an increase in the tobacco excise. This would have ultimately meant improved health outcomes, less expenditure on health care for those who smoke and reduced consumption of tobacco. It was a win-win solution. But, as always with this Prime Minister, his way is the only way. He has been proven so wrong many times before.

This government and the state governments are not honest with public hospital waiting lists. We see hospital waiting lists lengthening—and what do they do? They disguise them. Through sleight of hand, they make waiting lists shorter than they appear. We have all heard from doctors who say that they know what their waiting lists are, yet the actual waiting lists appearing on the hospital records are far less. Hospital waiting lists are being disguised through sleight of hand. Hospital waiting lists are being disguised to cloud the true position of the health system. It is absolutely outrageous.

We are coming up to a milestone because on 30 June we get to assess the Prime Minister on one of his promises. The promise he made—a very solemn promise it was—was that the buck stopped with him on health. This legislation is not a very good precursor to that day where he is actually dismantling the private health insurance system through the measures in these bills, but the buck stops with him on health. We will be holding him to account for that promise. I do not have to look very far in my electorate to find many examples of where our health system is failing. The Mid North Coast Area Health Service is in the process of sacking 400 staff. I do not know how you can possibly maintain and improve health services by sacking 400 staff in an area where the population is ageing and growing. It was interesting to hear the head of the Mid North Coast Area Health Service, Chris Crawford, make the Orwellian claim that it was going to deliver more efficient services and more procedures by sacking 400 staff. I ask the members opposite and the members of this House to question that statement in light of the Prime Minister’s promise that on 30 June the buck stopped with him on health. How can you deliver better services, more procedures and more efficient health if you are going to sack 400 staff from the health service? It is absolutely outrageous.

The smaller hospitals in my electorate—the hospitals in Maclean, Macksville, Bellingen and Kempsey—are invariably concerned for their future. The smaller hospitals are always concerned that they are under pressure to downgrade services. We had a situation at Maclean where the Mid North Coast Area Health Service was attempting to sell off land, the funds from which were going to be diverted to another hospital out of the Maclean area. It is absolutely outrageous—a hospital under pressure and under threat of downgrading services. The people in the Bellingen community are equally concerned, as are the people in the Macleay Valley with regard to the Kempsey hospital. The Kempsey hospital is another example of a hospital under pressure of having its services downgraded. It is a hospital whose infrastructure dates back not to the 20th century but to the 19th century so old are some of the buildings. It is infrastructure that cannot cope with the needs of 21st century medicine. It is infrastructure that has been sadly neglected by Labor in state government. It is infrastructure that deserves to be upgraded if the Prime Minister is going to meet his promise that health services are going to be miraculously up to scratch by 30 June—or the buck stops with him.

We will be interested to see what the Prime Minister concludes on that fateful day. We will be interested to see what he says to the Australian people. We will be interested to see whether he is going to keep his promise, because I sadly doubt it. I feel that 30 June will come and it will go and we will have no resolution from this government or the Prime Minister as to whether health services are up to scratch. I think one thing will become clear: this Prime Minister will shirk his responsibility that the buck stops with him.

In conclusion, I say that this is very much a retrograde step for the people of Australia. Placing more pressure on the public hospital system cannot be good for health outcomes. Everywhere you go, the public hospital system is buckling under the strain. Everywhere you go and talk to people, they are struggling to pay their private health insurance premiums. This measure is only going to lengthen hospital waiting lists. This measure is only going to increase the pressure on the public system. This measure is only going to push up the cost of private health insurance for people who are struggling to pay it. I certainly oppose this legislation and the government should be condemned for introducing such a retrograde step to our health system.

Peter Slipper (Fisher, Liberal Party) Share this | Link to this | Hansard source

I also oppose this legislation because I believe that the parliament of Australia ought to hold the government of Australia to its promises. I also speak on behalf of the 58,299 people in the electorate of Fisher who, as at 1 January this year, are covered by private health insurance. All of us believe that good quality health services are absolutely essential in 2009. We are a country which has been perceived to be the lucky country, and over the years we have had relatively good health services. One of the challenges that the former Howard government had was that people were dropping out of the private health insurance system and those who remained were paying ever higher premiums, and also it meant that people who were dropping out of the system moved into public health and extended waiting lists even further.

The way to have a prosperous and successful public health system is to have a large proportion of the community covered by private health insurance because people who are covered by private health insurance largely will not use public hospitals, and that means that the public hospitals are available for those people who do not have private health insurance or who cannot afford private health insurance even with the assistance of rebates. The legislation before the chamber will have the effect of discouraging people either from entering into private health insurance or from continuing to be in private health insurance. I just think that it is one of the most retrograde pieces of legislation that I have ever seen in the parliament during the period of my service. The rebates are being reduced to 20 per cent for singles earning between $75,001 and $90,000 and families earning between $150,001 and $180,000, and reduced further to 10 per cent for singles earning between $90,001 and $120,000 and families earning between $180,001 and $240,000.

We have a situation where the government has been thoroughly irresponsible in the economic area. It inherited a budget that was in surplus, and now we have moved from a situation of absolutely no government debt to a position where we have mortgaged the future for generations to come. There is $300 billion of debt that this government has sought to impose on today’s Australians and tomorrow’s Australians and Australians into the future. Australians are now paying the price for the government’s reckless spending, including spiralling and out-of-control debt and deficits, which will be before us for a very long period of time.

The government had an option, which was pointed out by the Leader of the Opposition in his budget reply speech, and what could have happened is that there should have been an increase in the excise on tobacco. That would have meant that the Prime Minister and the government would have been able to make those savings and allow people to continue to receive the private health insurance rebate at the rate that it currently is. I simply do not know why the government seeks to encourage the use of tobacco at the same time as it is forcing people out of the private health insurance system.

Let us look at a number of the promises made by the Prime Minister and by the Minister for Health and Ageing over the months and years which helped to assure people that they would not tinker with this system. But the system has been attacked by this government and a lot of people would feel that they voted on a fraudulent basis at the last election. They voted believing the government would not play with the private health insurance system, yet what is being delivered by this government is quite different from the rhetoric and promises that were delivered by the government when it was in opposition. The Prime Minister in an interview with Leon Byner on radio FIVEaa on 24 August 2007 had this exchange:

BYNER: All right, now, let me ask you a couple of questions that listeners have called in on—Lorraine wants to know if you are going to take off the rebate for private health funds which currently the Government supports, that’s the 30 per cent we’re talking about?

The Prime Minister answered:

Absolutely not.

The Prime Minister in a letter to the AHIA on 20 November 2007 said:

Both my Shadow Minister for Health, Nicola Roxon, and I have made clear on many occasions this year that Federal Labor is committed to retaining the existing private health insurance rebates, including the 30 per cent general rebate and the 35 and 40 per cent rebates for older Australians.

The Prime Minister on 25 February 2008 at a press conference in his courtyard said:

The Private Health Insurance Rebate policy remains unchanged and will remain unchanged.

The now Minister for Health and Ageing, then shadow minister, in a media release on 26 September 2007 said:

On many occasions for many months, Federal Labor has made it crystal clear that we are committed to retaining all of the existing Private Health Insurance rebates, including the 30 per cent general rebate and the 35 and 50 per cent rebates for older Australians.

The Liberals continue to try to scare people into thinking Labor will take away the rebates. This is absolutely untrue.

The health minister on 24 February this year said to the Age:

The Government is firmly committed to retaining the existing private health insurance rebates.

The minister for health accuses the opposition of trying to scare people into thinking Labor will take away the rebates. What Labor is doing in this legislation is diminishing the rebates, taking away some of the rebates, and it is really sad when the government of the country has been caught telling untruths.

The attitude of the government towards private health insurance simply represents an ongoing ideological hatred of private health insurance, which the Labor Party has possessed for a very long time. It is a poorly considered, ideologically driven policy. Despite the Prime Minister’s ‘Robin Hood’ rhetoric, one million Australians with private health insurance live in households where the annual income is less than $26,000 and all of those people will be affected.

We believe that it is right for all Australians to take charge of their own healthcare needs and plan for the future. We have always worked hard to deliver incentives to promote the uptake of private health insurance and to take the pressure off Medicare. These were key reforms by the former Howard government. These are reforms which are being unwound in this legislation. These are reforms which are being unwound as a result of the government breaking the promises that it made not once, not twice, not thrice, but over and over again. There would have been many people who voted in the election on 24 November 2007 on the basis of the promises of the government not to interfere with private health insurance, but obviously the government has its core promises and its non-core promises. Clearly it seems to me that any promise made by this government would go into the category of a non-core promise.

Let us look at what organisations like the Australian Health Insurance Association have said. They said, on 12 May 2009:

The Rudd government’s decision to dismantle the private health insurance rebate will place increased pressure on the public hospital system and force up premiums for those Australians who take responsibility for their own health care by taking out private health cover.

The AMA said, on the same date:

Changes to the 30% Private Health Insurance Rebate mean many Australian singles and families will pay a lot more for health insurance, and if you don’t keep your private health insurance you’ll be supplied with an increased Medicare levy surcharge. They get you both ways.

The Australian Private Hospitals Association said on 12 May:

The changes to the private health insurance rebate announced in tonight’s budget are a clear breach of election promises made by the Rudd Government.

The National Association of Specialist Obstetricians and Gynaecologists have pointed out in a press release:

Federal budget announcement to wind back safety net rebates for private obstetric services will significantly affect affordability for the majority of Australian women choosing to hear from specialist obstetricians.

Dr Pesce, President of the National Association … said this is a disappointing outcome for women who seek choice, access and affordability for pregnancy care.

The Heart Foundation have said in respect of tobacco:

Price increases are one of the most effective best ways of encouraging smokers to quit as well is deterring young people from starting.

The AMA said on 15 May that it welcomed a proposed increase in tobacco tax.

So the government has the choice of increasing tobacco excise and leaving the private health insurance rebate where it is. The government has the choice of improving the health outcome for Australians by discouraging tobacco use on the one hand or, on the other hand, it has the choice of breaking a promise made by the health minister and the Prime Minister and numerous other luminaries in the government over a very long period of time.

I have a lot more to say but quite regrettably, because of the time constraints and the arrangements made between the whips, I must conclude now. I do want to say I very strongly oppose this legislation. It is bad legislation; it is legislation which breaks an election promise. It is not necessary to break that promise because there is a clear alternative there and that is to increase the tobacco excise. The same amount of revenue would have come from increased tobacco excise and it would have meant that so many Australians who will be forced out of the private health insurance system would have been able to stay there. The best way to have a strong public health system is to have a strong private health system, and this government through the changes in this legislation will undermine both the private health system and the public health system. It stands condemned.

Nicola Roxon (Gellibrand, Australian Labor Party, Minister for Health and Ageing) Share this | Link to this | Hansard source

I appreciate the opportunity to sum up on this debate in which many members of the House have spoken. I thank them for their contributions. The Fairer Private Health Insurance Incentives Bill 2009, the Fairer Private Health Insurance Incentives (Medicare Levy Surcharge) Bill 2009 and the Fairer Private Health Insurance Incentives (Medicare Levy Surcharge—Fringe Benefits) Bill 2009 will amend the various acts to give effect to our recent budget measures to introduce three new private health insurance incentive tiers.

The government has made clear that it supports a mixed model of balanced public and private health services, and striking the right balance is something the government is determined to do in maintaining a universal system with both public and private providers. In our health system we see this as a complementary way that services can be provided. They do not need to be supplementary or competitive. To help ensure that the private health system remains a sustainable part of the system, the government is rebalancing support for private health insurance. The government believes that our targeted reforms will provide a fairer distribution of benefits because the government does not believe that low-income earners should be subsidising the private health insurance for high-income earners. At the same time, high-income earners will also face increased costs if they opt out of health cover.

I would like to respond briefly to a number of comments raised in the debate, particularly by the member for Dickson. Firstly, we have changed our policy in respect of the private health insurance rebate because the rebate was becoming unsustainable. In a budget that has taken a $200 billion hit as a result of the biggest global financial crisis in 75 years, this is not surprising. Clearly this presented a challenge in the current fiscal environment. The global financial crisis forced the government to make a tough decision about what was right for Australia in the long term, and the $1.9 billion saving to government expenditure over four years associated with these reforms will help ensure the government’s support for private health insurance remains fair and sustainable. We believe we need to use taxpayers’ money wisely, and those that can afford to pay more should pay more. I can assure you that this was a hard decision and one that was not taken lightly. But it is the right decision for Australia’s long-term financial future.

In respect of sustainability, I have previously indicated that these reforms will bring government support for private health insurance in line with the principle underpinning the Australian tax transfer system—something understood very well by the member for Dickson—that the largest benefits are provided to those on the lowest incomes. In fact, we heard very many speakers from the other side feigning concern about those on the lowest incomes who have private health insurance, when in fact these changes do not have any impact on the rebate that those low-income earners receive. In fact, it is quite the opposite—what these changes mean is that low-income earners will no longer be subsidising the rebate paid to high-income earners, like those of us in this House who can well afford to contribute to our private health insurance ourselves. Putting the private health insurance rebate onto a sustainable footing also ensures that the government will have the capacity to continue to support the rebate into the future for those who most need our support. This is a fairer, more sustainable system and a better use of the precious health dollar.

I do have to ask whether members opposite seriously think it is fair that high-income earners should have their health insurance costs subsidised by people who are not nearly as well off. This side of the House does not think so, and we do not think that such an arrangement is affordable. Spending on the current rebate was growing quickly and was expected to double as a proportion of health expenditure by 2046-47. Obviously those health projections are a long way out, but that level was not sustainable into the future. Annual indexation, however, of these new tiers is tied to average weekly earnings and will ensure that these changes remain equitable into the future. These changes are logical and even more logical given the global financial situation, and it is a targeted, sensible change. Separated from much of the rhetoric that we have heard in this debate and that often surrounds the health debate, it is just a reasonable change for us to make.

Many of the speakers opposite also raised concern about the impact on public hospitals—this is, I might note, for many of them a newfound concern for public hospitals. However, in my second reading speech, which I will not go through again in detail, I explained that the estimated impact of this measure is that around 25,000 people may drop their private health insurance, of which about 8,000 people over two years would require admission to hospital. On the basis of that modelling, when you consider that our public hospitals admit 4.7 million people every single year—that is over nine million admissions every two years—this is a drop in the ocean. The Australian Healthcare and Hospitals Association made that clear in their statements:

AHHA dismissed the concerns of the Opposition and the private health insurance industry that means testing would result in increased pressure on the public health system. There is no evidence to support this claim and as a peak body for public health services AHHA has no such concerns, provided the funds that are saved by this measure are directly invested back into public health care.

Of course, the government’s record investment under the new $64 billion Council of Australian Governments agreement, where hospitals will receive 50 per cent more than they did under the previous government’s last agreement, clearly demonstrates that the government is serious about boosting capacity and services in public hospitals. Further, our investments in preventative health will assist us in keeping people out of hospital in the first place.

Regarding the effect on premiums, a matter also raised by a number of members in the debate, we expect these changes to have minimal adverse impact on private health fund membership because 99.7 per cent of insured people are expected to retain their private health insurance. This is because, of course, those with higher incomes who receive a lower rebate will face an increased tax penalty if they avoid private health insurance. The member for Dickson quoted doom and gloom from a few health sector figures—the Australian Health Insurance Association and the Australian Private Hospitals Association—but there are many other views with a contrary perspective, such as, as I have already indicated, the AHHA but also, for example, Professor John Dwyer, former chair of the Australian Health Care Reform Alliance, who said:

The people that are heavy users of private health insurance or would anticipate that they might be, especially older Australians, will bite the bullet and stay in the system because they had private health insurance before the 30 per cent rebate came in anyway.

Finally, I come to the amendment moved by the member for Dickson to impose more tax on tobacco. Firstly, after railing in another context about how we do not need any new taxes, something must have happened to the member for Dickson—he has found a road to Damascus. Now, all of a sudden, it seems that new taxes are de rigueur, which is particularly curious given his complete lack of action in this area when he was the Assistant Treasurer in the previous government with control of the tax policy levers.

In terms of tobacco taxes, there are two processes currently in progress which we will look at on their merit: firstly, the Henry review of taxation; and, secondly, the National Preventative Health Taskforce. When the government has received these reports, it will consider its position in a considered fashion taking into account all the evidence. So we will not be supporting the amendment as part of this debate. If the opposition are serious about taxes, they should now support the government’s alcopops measure.

In summary, we believe that this measure will make the private health insurance system fairer and more balanced. It will keep our health budget on a more sustainable footing in the long term. By maintaining a carefully designed system of carrots and sticks, it will have a negligible effect on both premiums and the public hospital system. I also table some minor corrections. I understand the figure of $1 needs to be added in a number of places to the explanatory memorandum and I table those corrections.

Question put:

That the words proposed to be omitted (Mr Dutton’s amendment) stand part of the question.